A Bitcoin reserve would be a bad deal for Americans

BITCOIN HAS SHOT up more than 40% since Donald Trump's victory in the US presidential election, in part on hopes that he'll champion a government reserve devoted entirely to the cryptocurrency.

- Bloomberg

He supported the idea during his campaign, and crypto-friendly legislators have offered ways to make it happen.

It's hard to fathom how this would benefit most Americans.

Bitcoin has some positive attributes. It's portable — you can keep millions of dollars' worth on a thumb drive. It's semi-anonymous, in the sense that holders are identified only by a public alphanumeric key. It can be transferred to anyone, anywhere without relying on government-regulated banks or other traditional financial intermediaries. And adding it to a portfolio of stocks and bonds might provide some diversification benefit.

But Bitcoin hardly qualifies as money. Its volatility makes it a poor medium of exchange. In most countries, people don't have to accept it as payment. Transactions are slow and expensive, requiring significant computing power and energy to validate each one. Moreover, if you lose that thumb drive, you've lost your Bitcoin.