Opinion: US Bitcoin Reserve Won't Be a Boon for Cryptocurrency

The creation of a national Bitcoin reserve in the US could have a negative impact on both the cryptocurrency market and the dollar, OKX Global Managing Partner Haider Rafiq told Cointelegraph.

In his opinion, any government holding a significant amount of Bitcoin could manipulate the price by dumping the asset onto the market. This would undermine the fundamental role of digital gold as neutral, decentralized money.

The idea of a crypto reserve in the United States currently enjoys bipartisan support, but this could change under the new administration, the expert believes.

“As circumstances change, the concentration of large volumes of BTC on a country's balance sheet could pose a risk of liquidation,” Rafik noted.

As an example, he cited the sale of ~50,000 BTC by German authorities in the summer of 2024. Selling pressure kept digital gold prices below $60,000.

Rafik also believes that the creation of a US strategic bitcoin reserve could have wide-ranging macroeconomic consequences. The most significant of these would be a loss of confidence in the dollar.

The creation of a national crypto fund will signal that the currency that underpins the global economy has weakened and cannot support its value through economic strength, Rafik explained.

According to him, such a development would shake the entire financial system, with investors fleeing to safe-haven assets like gold or the Swiss franc. They would also dump risky instruments, triggering a cascade of liquidations.

“This will likely lead to a major crash as markets react to radical changes in the global financial system,” Rafik concluded.

As a reminder, in September, CryptoQuant experts noted a sharp slowdown in corporate Bitcoin reserves. Capriole founder Charles Edwards warned against this backdrop that there was a growing risk of a major sell-off in the asset.

Source: cryptonews.net