Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the comments of Arthur Hayes, co-founder of BitMEX, and how he believes the United States will be unable to create a crypto reserve.
Arthur Hayes - Crypto Reserve Unlikely in US
The co-founder of BitMEX, Arthur Hayes, has noted his doubt that the United States government will be capable of expanding their Bitcoin reserves. He cited the rising debt of the United States, political optics, and the cultural perception of crypto holders. This was revealed during a May 1 interview where Hayes noted that the idea of the U.S. printing money to buy Bitcoin is politically unpalatable, especially amid persistent stereotypes around so-called "Bitcoin bros." Hayes stated:
“The United States is a deficit country; the only way they can do a strategic reserve is by not selling the Bitcoin they took from people.”
This was in reference to the 198,012 Bitcoin which is already held by the United States government, and valued at over $18 billion, which have mainly be gained from seizures lined to the Silk Road, Bitfinex, along with other enforcement actions. Hayes also questioned whether any elected official would be capable of risking the potential backlash from printing dollars to purchase more Bitcoin. He noted how this would be especially bad when the mainstream narratives continue to view Bitcoin as an asset for club-hopping tech bros.
Ever since Donald Trump got back into the Oval Office the idea of a United States strategic Bitcoin reserve has been hot topic. Back on March 6 President Trump signed an executive order to create a national digital asset stockpile and so far the stockpile is composed of seized assets. The order has so far failed to remove any speculation of potential further purchases but crypto leaders warn that such a move could ignite a global race for Bitcoin. The co-founder of 1inch, Sergej Kunz, stated at a Cointelegraph event in Dubai:
“If the U.S. starts buying Bitcoin for a reserve, other countries will rush to accumulate it too.”
Hayes remains dismissive of a potential United States Bitcoin reserve but he does have plenty of confidence in the traditional market cycle where Bitcoin leads a rally before funds rotate into altcoins. At the time of writing Bitcoin have a market dominance of just below 65%. This is up more than 11% since January and Hayes feels this cycle behaviour will continue despite alternative views from analysts such as Benjamin Cowen and CryptoQuant CEO Ki Young Ju. They both argue that stablecoin pairings and fiat-based altcoin volumes have changed the dynamic.
The support from Hayes in terms of the altseason debate is fuelled by his belief that the market is following the same pattern as it did back in 2021. This is despite the argument from other experts that the old signals, such as a sharp drop in Bitcoin dominance, are no longer as steadfast as they once were given the sophistication of the current market. Hayes is not convinced the pattern will change and he stated:
“I personally think Bitcoin dominance is going back to where it was before the 2021 altcoin season, which is about 70%. Then people just start rotating. It’s back at all-time highs; bull markets are back, and altcoins should outperform. Should is a keyword there. Depends on what you buy.”
Other analysts doubt that Bitcoin will ever reach the 70% mark again. Into The Cryptoverse founder Benjamin Cowen explained back in August that he does not believe that it will reach 70% again and his target for Bitcoin dominance was 60%. Ki Young Ju said that altseason is no longer defined by Bitcoin capital rotation. He went on to state that the traditional signal marking the start of an altcoin season when capital rotates from Bitcoin to altcoins is outdated and instead altcoin trading volume has become more prevalent against stablecoin and fiat currency pairs. This is shown in the trading volumes as they now favour fiat and stablecoin pairs over Bitcoin denominated alt trades.
At the time of writing Bitcoin is closing in on $95,000 once again as its dominance continues to grow. Whether or not history makes a repeat remains to be seen but the continued growth in Bitcoin price is always a welcome sign.
Meanwhile the debate will continue over whether or not the United States government should pursue their Bitcoin reserve. Public companies have continued to show interest in the leading cryptocurrency, with Michael Saylor’s firm, Strategy, continuing to stockpile Bitcoin. They have doubled their debt issuance target from $21 billion to $42 billion meaning they are planning to sell a further 21 billion in common shares after depleting a previous program of the same size authorized in October. Of that previous program they have $14.6 billion remaining under its current authorization.
The Arthur Hayes interview can be viewed below.
Have a great day.
Peace. CryptoGod-1.
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