US Bitcoin Reserve: A Potential Threat to Cryptocurrency

US bitcoin reserve could harm cryptocurrency and dollar, says OKX's Haider Rafique.

The establishment of a national bitcoin reserve in the United States could negatively impact both the cryptocurrency market and the dollar, according to Haider Rafique, Global Managing Partner at OKX, in an interview with Cointelegraph.

In his view, any government holding a significant stockpile of bitcoins could manipulate the price by releasing assets into the market. This would undermine the fundamental role of digital gold as neutral, decentralized money.    

Currently, the idea of a crypto reserve in the United States has bipartisan support, but this could change with a new administration, the expert believes.

“As circumstances change, the concentration of large volumes of BTC on a country’s balance sheet could pose a liquidation risk,” Rafique noted.

He cited the example of the German authorities’ sale of ~50,000 BTC in the summer of 2024. The selling pressure kept the digital gold’s price below $60,000.

Rafique also believes that the creation of a US strategic bitcoin reserve could trigger widespread macroeconomic consequences, the most significant being a loss of confidence in the dollar.

The formation of a national crypto fund would signal that the currency underpinning the global economy has weakened and cannot maintain its value through economic strength, Rafique explained.

According to him, such a development would shock the entire financial system, prompting investors to seek safe-haven assets like gold or the Swiss franc. They would also divest from risky instruments, causing a cascade of liquidations.

“This is likely to lead to a significant crash as markets react to radical changes in the global financial system,” Rafique concluded.

In September, CryptoQuant experts noted a sharp slowdown in corporate bitcoin reserve volumes. Against this backdrop, Capriole founder Charles Edwards stated that the risk of a large-scale asset sell-off is growing.