Monday, US President Joe Biden issued the government’s economic report, which features Bitcoin prominently. BTC is cited up to seventy-five times in the paper, which seeks to disparage Bitcoin and advocate a Central Bank Digital Currency (CBDC) of the United States as the only answer.
In the section “The Perceived Appeal of Crypto Assets,” the White House devotes many pages to describing how Bitcoin operates before denying the main cryptocurrency’s definition of money. Notably, Bitcoin lacks two of the three qualities of currency.
First, the paper states that Bitcoin does not fit the requirements of a unit of account since the prices of goods and services are not in BTC but in US dollars, necessitating a conversion. In response to whether Bitcoin can function as a trade means, the White House argues that BTC is “less effective as a medium of exchange” than the U.S. dollar.
The paper said, “The strength of the U.S. dollar is derived from several important factors, such as faith in government institutions and the legal system, whereas cryptocurrencies lack these factors.” Thirdly, the research rejects Bitcoin as a store of wealth because of its “significant volatility.”
For instance, the value of a Bitcoin (compared to the U.S. dollar) grew by more than 1,000 percent between March 2019 and March 2021, then dropped by more than 70 percent between November 2021 and October 2022. This volatility implies that anybody storing their wealth in Bitcoins is exposed to a significant risk of buying power fluctuation.
Given the enormous depreciation of the US dollar relative to Bitcoin, record-high inflation, the US financial crisis, and bank bailouts, among other factors, Bitcoin supporters should see the claims as more than flimsy. In reaction to the story, Troy Cross stated, “What the White House cannot say is that the value of Bitcoin is in protecting you from their abuses of authority, whether monetary or otherwise.”
As expected, the White House slams Bitcoin mining as an energy-guzzling monster in its report. The paper cites a 2022 research by the University of Cambridge, which asserts that Bitcoin mining utilized more energy in 2021 than various nations, including Finland, Belgium, and Chile. The study reported other environmental impacts, such as noise, air, and water contamination, but made no distinctions.