A new study published by the Federal Reserve Bank of Minneapolis shows that Bitcoin 
$66,895 He suggested that cryptoassets and similar assets should be taxed or banned to manage persistent budget deficits. According to the research, Bitcoin’s fixed supply makes fiscal policies difficult.
Fed Views
The study, published on October 17, states that the presence of Bitcoin in the economy creates a “budget balance trap”. This leaves governments forced to balance their budgets due to Bitcoin’s fixed supply and lack of real resource demands.
Matthew Sigel, VanEck’s head of digital asset research, compared the Minneapolis Fed’s stance to criticism from the European Central Bank. Both institutions aim to position government debt as the only risk-free security, Sigel said.
“They aim to position government debt as the only risk-free security.” – Matthew Sigel, VanEck
Despite the criticism, institutional adoption of cryptocurrencies is growing rapidly. After spot Bitcoin and Ether ETFs are approved in 2024, 80% of institutional investors plan to increase their investments.
Critical Comments
Neel Kashkari, president of the Minneapolis Fed, criticized cryptocurrencies, calling them a tool for criminal activity. Kashkari stated that “very few transactions take place with cryptocurrency” and that it mostly serves illegal activities.
Nic Carter criticized the Fed official’s views and said, “He should be banned for being so biased.” On the other hand, the crypto community showed various reactions to these criticisms.
The increase in institutional investment points to growth in crypto markets. Investors maintain and plan to increase their interest in crypto assets despite the stance of regulatory authorities.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
