Establishing a national Bitcoin strategic reserve may lead to adverse effects on the Bitcoin market and the U.S. dollar, according to Haider Rafique, a key figure in government and investor relations at crypto exchange OKX. Rafique expressed concerns that if a government accumulates substantial amounts of Bitcoin, it could manipulate market prices by liquidating its holdings, undermining Bitcoin’s core philosophy as neutral and decentralized currency.
He raised the question of potential future administrative changes, suggesting that a new government could view such a reserve as an outdated strategy. Despite growing bipartisan support for cryptocurrency, Rafique emphasized that governmental policies can shift rapidly, and having large quantities of Bitcoin on a national balance sheet could expose the country to significant liquidation risks.
He referenced a case in 2024 where the German government sold off 50,000 BTC, which contributed to keeping Bitcoin prices suppressed below the $60,000 mark.
The debate surrounding a national Bitcoin treasury is particularly pronounced among Bitcoin advocates, who argue that creating such a reserve could be a pivotal step toward establishing Bitcoin as the global reserve currency.
Rafique also pointed to broader implications for the U.S. dollar and financial markets. He warned that the establishment of a Bitcoin strategic reserve could incite a loss of confidence in the dollar, indicating that it is unable to maintain its value based solely on economic fundamentals. This could trigger widespread financial turbulence as investors might shift to more stable assets like gold or the Swiss franc.
Additionally, a mass sell-off in risk-on assets could lead to a domino effect of liquidations across various financial markets, potentially precipitating a significant market crash in response to this fundamental shift in the global financial landscape.
