Arthur Hayes Warns Against U.S. Bitcoin Reserve, Citing Political Risks

A prominent crypto industry figure has raised concerns about the idea of a U.S. Bitcoin reserve, arguing that it could be more detrimental than beneficial.

Arthur Hayes, Chief Investment Officer of Maelstrom Fund, believes that the creation of a national Bitcoin stockpile would likely become a political tool, subject to manipulation depending on which party is in power.

Hayes pointed out that Bitcoin, under such a scheme, would simply become another financial asset, vulnerable to being sold off whenever it suits political agendas. While he admits that an initial purchase of Bitcoin by the government might drive prices higher, he stresses that its long-term use would likely be driven by political motivations rather than economic or financial goals.

While Hayes is critical, others in the industry, including investment firms like VanEck, have presented more optimistic views. They argue that a Bitcoin reserve could potentially help reduce the U.S. national debt in the long term, with some even suggesting it could serve as a stabilizing force for the U.S. dollar. Figures such as Michael Saylor believe it would place the U.S. in a dominant position within the global digital economy.

Despite these competing perspectives, Hayes remains cautious, suggesting that such a reserve would still be at the mercy of future political shifts. This concern over the political influence of Bitcoin reserves is compounded by Hayes’ past opposition to Bitcoin ETFs, where he warned they could create a more centralized Bitcoin market, weakening the overall network.

The discussions surrounding a U.S. Bitcoin reserve continue to evolve, with high-profile figures such as Senator Cynthia Lummis advocating for the idea, and market speculators assigning odds to its potential launch. However, Hayes remains firmly against any government involvement that might destabilize the decentralized nature of Bitcoin.