BitMex co-founder Arthur Hayes strongly opposes the proposed US Strategic Bitcoin Reserve (SBR), calling it a false initiative.
In a blog post on February 6th, he argued that the preliminary plan and the looming regulatory bill would do more harm than good for the crypto industry.
Discussions on SBR
Hayes criticized the US government for accumulating Bitcoin as part of its national stockpile. This is a move that some crypto advocates believe will justify and increase the value of assets.
He pointed out a fundamental flaw. The assets purchased by governments can be sold quickly, especially when political leadership changes.
He warned that the new administration would consider the Bitcoin Reserve as a financial lifeline and could liquidate it to fund political initiatives.
He wrote:
“For the next Democratic-controlled Congress or presidency, finding simple cash to spend on merchandise for supporters is the first command. This is the first command, regardless of the actual political system, Instructions: Just sitting there and ready to sell. You need to sign the paper.”
Hayes also said the government will stockpile assets for political leverage rather than for long-term financial strategies. If the US buys a lot of bitcoin, the price will likely skyrocket. However, if purchases stop, momentum could fade away, leading to market stagnation and slump, he explained.
Beyond economic implications, Hayes questioned whether the US government would be meaningfully involved in the Bitcoin ecosystem.
He doubted they would contribute to development, support Bitcoin core engineers, and manipulate nodes. Instead, he suggested that the initiative may serve as a temporary political stunt rather than a long-term commitment.
Hayes said:
“Would they donate to the sponsors of Bitcoin Core Devs? Are they going to run nodes? Maybe… But the way to talk about BSR is like set and forget type exercise to me. It seems like Trump and the Republicans can look at the monthly price of Bitcoin and claim that the mission has achieved it.”
Regulatory concerns
Beyond SBR, Hayes also tackles concerns about cryptographic regulations, aiming for what is called the “Frankenstein Crypto Bill.”
Hayes argued that regulatory measures are likely to serve the interests of established financial institutions rather than fostering innovation.
He noted that large investors in concentrated finance (CEFI) companies have the most influence in organizing policies. He warned that these entities are likely to promote regulations that can only be followed by them, he warned.
He wrote:
“I’m far from the circus surrounding the demons. Those who own a great interest in a centralized cryptocurrency intermediary will be forced to look forward to the amount of noise they produce. It seems most likely that you will be given it.”
Hayes also had a warning message to entrepreneurs who wanted the US to provide a stable regulatory environment. He warned that corporate giants would work to maintain control of startups because compliance is too expensive for startups.
He added:
“The hope for cryptographic regulation is an overly complex, normative form of rules where only large, wealthy central companies can afford, if they are likely to be accepted, if any. “
If that happens, Bitmex co-founders pointed out that monopoly will create an industry dominated by monopoly, while limiting the number of innovative startups.
Hayes concluded:
“Be careful with all builders around the world who are moving to America for crypto-friendly management. If you implicitly support such outcomes, your startup is destined to fail. GobbledyGook The exclusive business agrees to the invasive barrier of regulations, and does not kindly look at actual innovation.
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