Arthur Hayes, co-founder of BitMEX, has expressed skepticism regarding the United States’ potential to substantially increase its Bitcoin holdings, primarily due to the nation’s soaring national debt and the public perception of Bitcoin investors.
In a recent interview on May 1, Hayes questioned the likelihood of the U.S. government proactively amassing a “strategic Bitcoin reserve,” beyond the nearly 200,000 BTC already being held. These assets have largely been confiscated during criminal investigations linked to cases such as Silk Road and Bitfinex.
“The United States is a deficit country,” Hayes remarked. “The only way they can create a Strategic Reserve is if they don’t sell the Bitcoin they’ve seized, which amounts to 200,000 Bitcoin.”
Arthur Hayes Questions U.S. Bitcoin Acquisition
Hayes noted that while the U.S. government officially possesses over 198,000 BTC, worth more than $18 billion, the prospect of growing these reserves via direct purchases seems politically unfeasible.
He emphasized the challenges any duly elected leader would face in justifying the printing of more money to acquire Bitcoin. “Especially when the prevailing narrative portrays Bitcoin enthusiasts as a crowd of ‘bros’ heading to the club,” Hayes added. “Is that truly the image you want associated with your policy?”
These remarks come shortly after former President Donald Trump signed an executive order aimed at establishing a U.S. strategic Bitcoin reserve, raising questions about whether this initiative signals long-term institutional backing or merely serves a symbolic purpose.
Despite Hayes’ doubts, other voices in the cryptocurrency space argue that such a move could ignite a global frenzy for Bitcoin.
On the market front, Hayes reiterated his prediction that Bitcoin’s dominance is poised to revert to pre-2021 levels around 70%, hinting at a return to the typical boom-and-bust framework characterized by Bitcoin spikes followed by surges in altcoin activity.
“We’re back at all-time highs; bull markets are back, and altcoins should see better performance,” he stated. “’Should’ is the key word here. It depends on your choices.”
At present, Bitcoin dominance stands at 64.78%, an increase from just below 60% at the beginning of the year.
While Hayes anticipates a resurgence to historical highs for Bitcoin dominance, opinions diverge. Analysts like Benjamin Cowen suggest that the cryptocurrency’s dominance is unlikely to hit 70% again.
Others, including CryptoQuant CEO Ki Young Ju, propose that traditional indices for measuring altcoin seasons may be antiquated, driven instead by newer signals centered around fiat and stablecoin volumes.
Alt season is no longer defined by asset rotation from #Bitcoin.
The surge in altcoin trading volume isn’t driven by $BTC pairs but by stablecoin and fiat pairs, reflecting real market growth rather than asset rotation.
Stablecoin liquidity better explains the altcoin markets. pic.twitter.com/riejM7oXyk
— Ki Young Ju (@ki_young_ju) December 2, 2024
Saylor’s Strategy Doubles Capital Raise for Bitcoin Purchase to $84B
In light of the U.S. government’s reluctance to enhance its Bitcoin portfolio, public companies are increasingly showing enthusiasm for the cryptocurrency.
Recently, Michael Saylor’s company, Strategy, announced plans to double its capital-raising initiative to $84 billion as part of a robust strategy to accumulate more Bitcoin.
The Virginia-based firm revealed on Thursday that it has filed to sell an additional $21 billion in common shares, having exhausted a prior authorization of the same amount established last October.
Additionally, Strategy has ramped up its debt issuance target from $21 billion to $42 billion, with $14.6 billion still available under its current authorization.
Data from the first quarter indicates that publicly traded companies have increased their Bitcoin holdings by 16.1%, reflecting sustained institutional interest in the leading cryptocurrency despite ongoing market fluctuations.
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