Analyst Willy Woo warns that if the U.S. government seizes Bitcoin like it did gold in the Great Depression, retail investors could be in trouble.
Whale vs. Retail: Who Controls Their Coins?
- Whales: Large Bitcoin holders who control their private keys, allowing them to sign transactions and prove ownership.
- Retailers:
Everyday investors who typically store their Bitcoin on exchanges, which means they don’t have direct control over their private keys.
The Role of Storage
- 87% of Bitcoin is held in self-custody wallets, where individuals control their private keys.
- 12% is on exchanges, where investors can easily sell their Bitcoin for other assets.
The Risk for Retailers
Woo believes that if the government confiscates Bitcoin, it will target exchanges first. This means that retailers who store their Bitcoin on exchanges could lose their funds.
The Economic Outlook
- Rising inflation and falling GDP in the U.S. raise concerns about a possible recession.
- If a recession occurs, the government may be more likely to seize assets to replenish its reserves.
Conclusion
While it’s unclear if the government will actually confiscate Bitcoin, Woo’s analysis suggests that retailers who store their coins on exchanges could be at risk. Whales, on the other hand, are likely to be safe due to their control over their private keys.
