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US Bitcoin Reserve seen as 'political weapon' by Arthur Hayes

US Bitcoin Reserve seen as 'political weapon' by Arthur Hayes

GrafaGrafa2025/02/07 06:00
By:Isaac Francis

BitMEX co-founder Arthur Hayes has criticised the idea of a U.S. Strategic Bitcoin Reserve (SBR), calling it a potential "political weapon" rather than a sound financial strategy.

In a recent blog post, Hayes argued that such a reserve could be easily exploited for political agendas, undermining the long-term benefits for the crypto industry.

Hayes argues that governments stockpile assets for political leverage rather than long-term financial strategy.

He warns that a new administration could view the Bitcoin (CRYPTO:BTC) reserve as a readily available source of funds and liquidate it to finance political initiatives.

"There would be 1 million Bitcoin just sitting there, ready to be sold; it just takes a signature on a piece of paper," according to Hayes.

Hayes questions whether the U.S. government would meaningfully engage with the Bitcoin ecosystem, suggesting the initiative might be a temporary political stunt.

He doubts they would contribute to development, support Bitcoin core engineers, or operate nodes.

Hayes noted that while a Bitcoin reserve might initially boost prices, the gains would be temporary and driven by political rather than financial motives.

Hayes also cautioned against overcomplicated crypto regulatory bills, suggesting they could favor centralised institutions over true decentralisation.

Despite Hayes' concerns, speculation about a Bitcoin reserve has increased since former President Trump announced a sovereign wealth fund.

Senator Cynthia Lummis has expressed support for a Bitcoin reserve, and prediction markets estimate a significant chance of its creation by 2025.

In contrast to Hayes, some believe a Bitcoin reserve could reduce the national debt and strengthen the U.S. dollar.

VanEck predicted that a Bitcoin reserve could reduce America’s national debt by 35% by 2049.

Michael Saylor believes it could strengthen the US dollar.

Hayes has also voiced concerns about Bitcoin ETFs, fearing they could centralise Bitcoin holdings and negatively impact the network.

In late 2023, Hayes opposed the spot Bitcoin exchange-traded funds because the funds would be vacuumed up into a vault, drying up transaction activity.

At the time of reporting, the Bitcoin (BTC) price was $96,669.81.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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