With about four months until the United States presidential election, party candidates will continue to do all they can to win votes. In what political analysts have described as a move to win over the crypto community, the independent presidential candidate, Robert F. Kennedy Junior, has pledged to sign an executive order for the U.S. Treasury to purchase 4 million Bitcoin.
Notably, based on the current price valuation, that would amount to a staggering $242 billion. Charles Hoskinson, co-founder of Cardano, says the development would be a double-edged sword for Bitcoin if that happens.
Centralization: A Threat to Core Bitcoin Principles
According to Hoskinson, making Bitcoin the reserve asset of the U.S. exposes the digital asset to centralization risks. A notable benefit of Bitcoin lies in its decentralized supply distribution, which guarantees the cryptocurrency remains secure and tamper-proof.
“…It 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,” Hoskinson stated.
Finance experts say the challenge with the proposed pledge of the independent U.S. presidential candidate lies in the 19% amount, which places so much power on a single entity. It is worth noting that the Binance exchange holds the most significant single Bitcoin wallet, containing 248,000 BTC, or 1.26% of the total supply. According to Bitinfocharts data, the estimated worth is a staggering $15 billion.
Potential Price Surge: A Double-Edged Sword
Hoskinson maintains that in the broader financial market, if a single individual or company buys up, say, 20% of the world’s oil supply, it would be viewed as a cartel. He suggested that traditional models should refrain from gaining a foothold in the crypto ecosystem, with an emphasis on the industry’s decentralization.
Hoskinson also acknowledged the positive effect of such a move on the price of Bitcoin. According to him, making BTC a reserve asset would serve as a price catalyst, given that the digital asset would receive favorable regulatory support.
However, the Cardano co-founder believes that with the recent approval of Ethereum exchange-traded funds and Bitcoin ETF, cryptocurrency has come to stay and will open access to institutional and retail investors.
Hoskinson Predicts ETF Proliferation
Hoskinson also believes that various crypto ETFs will soon flood the market as traders on Wall Street stand to profit from such moves. He insists that ETFs will develop organically, and no amount of regulatory hurdles will stop people from creating or buying financial products. He hinted that Cardano would join the train at the launch of the ADA ETF.
Despite many development upgrades, Cardano’s price has stayed within the critical resistance level of $0.8. According to data from CoinMarketCap, at the time of writing, ADA trades at $0.3439.
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