U.Today – Peter Schiff, a vocal critic of (BTC), recently questioned the idea of the cryptocurrency serving as part of the US strategic reserve, calling the idea an “absurd” plan. In his opinion, such a move would be ineffective and problematic, primarily due to Bitcoin’s volatile volatility and potential impact on market stability.
This was in response to Tom Lee from Fundstrat, who said that BTC could aid solve the US budget deficit. During a recent live broadcast on CNBC, Lee suggested that if the cryptocurrency is added to the list of reserve assets, it could aid offset some of the country’s massive $36 trillion debt due to its potential to raise in value.
He also noted that established ways of reducing the deficit, such as changing tax policy or cutting spending, may not be enough on their own in the current economy. Therefore, Bitcoin could be a useful asset for the US Treasury and aid manage debt, the expert argued.
Why not? – explains Peter Schiff
No wonder Schiff didn’t think it was a good idea. He highlighted the liquidity risk, noting that if the United States held a significant amount of Bitcoin, any attempt to sell could easily cause a market crash, rendering the reserve immediately ineffective.
According to Schiff, such a scenario would be contrary to the strategic asset’s purpose of stabilizing or strengthening fiscal resilience. He argued that Bitcoin’s volatility and illiquidity make it unsuitable as a solemn reserve asset and cautioned against what he sees as misguided optimism about its apply by governments.
