Arthur Hayes, a crypto entrepreneur and former BitMEX CEO, isn’t happy about the idea of a US Bitcoin Strategic Reserve (BSR). In a recent essay, he calls it a terrible idea that will cause major problems within two years.
A Political Weapon, Not a Sound Investment
Hayes argues that a BSR would be driven by politics, not sound financial strategy. He paints a picture of a government buying a huge amount of Bitcoin, driving the price up. Then, a future administration, perhaps one less friendly to crypto, could sell off that massive reserve, crashing the market. He uses the example of a hypothetical Democratic administration liquidating a large Bitcoin stockpile for political gain.
Regulation: Favoring the Big Guys
Hayes also slams the proposed crypto regulatory bill, calling it overly complex and designed to benefit large, established players like Coinbase and BlackRock, not the smaller innovators. He believes this kind of regulation will only solidify the power of centralized institutions.
Hayes’ Alternative: A Bold Plan
Instead of a BSR, Hayes suggests a radical alternative: using Bitcoin to replace US sovereign debt as the global reserve asset. This involves a complex plan with century bonds and a gradual devaluation of the dollar, all while promoting Bitcoin as the new global reserve currency. The goal? To restore US global economic dominance.
A Missed Opportunity?
Hayes points out that crypto voters helped elect Donald Trump and the Republican Party. However, he’s disappointed by the slow progress on crypto-related legislation, contrasting it with the speed of other policy changes.
Bitcoin’s Future: A Price Prediction
Hayes predicts a potential Bitcoin price drop to between $70,000 and $75,000 before a long-term recovery. This hinges on the lack of legislation supporting innovation and further monetary stimulus.
The Bottom Line: Be Careful What You Wish For
Hayes’ message is simple: be cautious about what you ask for. He advises against supporting policies that could harm the long-term health of Bitcoin. He encourages everyone to focus on accumulating Bitcoin (“stacking sats”).
