The idea of Bitcoin becoming the reserve asset of the United States poses significant centralization risks for the world’s first cryptocurrency despite being an optimistic price catalyst, according to Charles Hoskinson.
Making Bitcoin a reserve asset for the US was recently floated by presidential candidate Robert F. Kennedy Junior, who said that he would sign an executive order for the US Treasury to purchase a total of 4 million Bitcoin (BTC) worth over $242 billion at today’s valuation.
Notably, that would represent 19% of the Bitcoin supply, said Charles Hoskinson, co-founder of Input Output Global and Cardano.
Hoskinson told Cointelegraph:
“It's a mixed bag. On one hand, it would be great for the price of Bitcoin, and it would be great for U.S. regulation of Bitcoin because the United States would be pro-Bitcoin in a certain respect.”
Bitcoin has recently staged a 21% recovery above the $60,000 mark after this week’s $510 billion crypto market sell-off nuked BTC price to a five-month low of $49,500 on Aug. 5, before the market started to recover.
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US could influence geopolitical power over Bitcoin
Bitcoin’s decentralized supply distribution is among its core benefits, which makes the world’s first cryptocurrency tamper-proof and secure.
However, the US holding 19% of BTC supply could introduce unwanted consequences, warned Hoskinson:
“On the other hand, it also means that if things happen the US disagrees with, because it has a strategic interest in the asset, it may use its geopolitical power to change that. So be careful who you welcome in, and be careful of the powers of those people…”
As of Aug. 9, the largest single Bitcoin wallet holds 1.26% of the supply, or 248,000 BTC worth $15 billion. The wallet belongs to Binance, the world’s largest crypto exchange, according to Bitinfocharts.
While the exact implications of the US holding a majority of the Bitcoin supply aren’t clear, this is usually a sign of concern with other global assets, explained Hoskinson:
“Traditionally, this is done by conventional regulators, especially with commodities. We don't like the idea of somebody buying up 20% of the world's oil supply or something like that. So that would be a cartel.”
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Crypto ETFs open retail access to digital assets: Hoskinson
The new Bitcoin and Ether (ETH) exchange-traded funds (ETFs) make cryptocurrency more accessible to retail investors, said Hoskinson:
“They’re going to make it more accessible to certain geographies, certain age groups, and also certain risk profiles. And that’s where Wall Street makes all of its money.”
Moreover, the crypto ETF floodgates have opened on Wall Street and Hoskinson expects an array of new crypto ETFs in the future, including an ADA (ADA) ETF. He added:
“You can't stop people from buying or creating financial products to aggregate things together or allow accessibility to happen. So ETFs are an organic thing, and they occur after the markets reach a certain level of maturity, both in terms of participation and regulation.”
Meanwhile, the European markets could pave the way for the first Ether staking ETF, which would signal another significant development for crypto adoption, Charles d’Haussy, CEO of the dYdX Foundation, told Cointelegraph.
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