In his newest essay entitled “The Genie,” crypto entrepreneur and former BitMEX CEO Arthur Hayes denounced requires a United States Bitcoin Strategic Reserve (BSR), warning that such a program would create “unnecessary pain in under two years” and rework the world’s largest cryptocurrency right into a potent political weapon. Hayes additionally cautioned the business towards pursuing what he deems to be an overcomplicated “Frankenstein crypto regulatory bill,” which, he argues, would primarily profit massive centralized establishments relatively than foster true decentralization.
A “Terrible Idea” For Bitcoin?
Hayes questions each the feasibility and the long-term penalties of building a nationwide Bitcoin stockpile. He argues the US authorities could be motivated by politics relatively than sound monetary technique, probably resulting in manipulation of the Bitcoin market.
In his view, a BSR dangers turning into a mechanism for politicians to boost funds for unrelated agendas: “Let’s assume that Trump is able to create a BSR. The government buys one million Bitcoin, as suggested by US Senator Lummis. Boom! The price goes nuts. Then, the buying concludes, and the up-only trend channel stops.”
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Hayes envisions a subsequent administration—one hostile to Bitcoin or crypto on the whole—deciding to liquidate this monumental reserve. “What if [the Democrats] got a veto-proof majority in the House of Representatives? By 2028, what if a Democrat won the election … finding easy piles of cash to spend on goodies for their supporters is the first directive. There are one million Bitcoin just sitting there, ready to be sold… The market would rightly fear when and how these Bitcoin would be sold.”
Another of Hayes’ key contentions is that regulation formed by particular pursuits might inadvertently stifle the very innovation it goals to advertise. According to Hayes, massive exchanges and monetary intermediaries with the assets to affect lawmakers usually tend to drive regulatory outcomes.
This, he suggests, will burden smaller innovators and strengthen the place of main centralized gamers: “The crypto regulatory wishes likely to be granted… will be in the form of overly complicated, prescriptive rules that only large and wealthy centralized companies can afford… Is that what the broader crypto community actually desired from the genie? … Maybe those readers who are shareholders of Coinbase and BlackRock want a Frankenstein crypto bill. But I believe this type of regulation does nothing to alter the status quo.”
An Alternative Proposal
Rather than a BSR, Hayes proposes a extra radical and sophisticated monetary association involving the US Treasury, Bitcoin, and “century bonds” (100-year zero-coupon bonds). His thought is for the US to unilaterally devalue its current Treasury obligations by asserting that Bitcoin will exchange sovereign debt because the impartial international reserve asset.
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The plan, in his personal phrases, would contain a public assertion from US Treasury Secretary Scott Bessent, declaring the intention to make use of Bitcoin because the reserve asset whereas retaining the US greenback because the invoicing forex. Afterward, the Dollar would bear a progressive devaluation, with the US Treasury bidding for Bitcoin at more and more increased costs whereas issuing century bonds as a substitute of instant money payouts.
The subsequent step could be extending the maturity of Treasury debt, with the Treasury promoting Bitcoin at a revenue to purchase again and retire shorter-term obligations, in the end pushing US debt maturity to 100 years. Additionally, international USD adoption could be accelerated by stablecoin transfers on social media platforms like Facebook and X, enabling on a regular basis customers to take part in US bond markets—bypassing standard banking intermediaries.
“That’s it for the financial history… The additional new goal is to make Bitcoin the global neutral reserve currency,” Hayes explains. He believes such a technique might restore US hegemony by transitioning from the normal “petrodollar” or “Treasury-based” system to at least one anchored in Bitcoin, all whereas making certain massive swaths of Bitcoin’s mining operations stay inside US borders.
In a extra cautionary afterword, Hayes highlights that crypto voters performed a notable function in returning Donald Trump and the Republican Party to energy. Yet he stresses the gradual tempo of motion on crypto points, contrasting it with the administration’s speedy implementation of tariffs and rollbacks of environmental, social, and governance (ESG) mandates.
“When Trump wants to act, he acts… The removal of ESG and DEI policies… came swiftly… That’s a shame because on the margin, the crypto single-issue voter put [the Republicans] in power.”
He additionally reiterates his forecast that Bitcoin might see a pointy correction to a variety of $70,000 to $75,000 earlier than rallying increased within the long-term —if there isn’t any instant, concrete laws favoring permissionless innovation or additional financial stimulus.
For now, Hayes urges these “lining up day after day dressed in a seersucker suit or block heels and a summer dress hoping to ask the orange genie for a wish” to think twice: “Stacking sats is my game, and I hope yours is too. Therefore, if you find yourself at the genie’s table… please wish for the right things.”
At press time, BTC traded at $98,190.
Featured picture created with DALL.E, chart from TradingView.com
