Arthur Hayes: US Bitcoin Purchases Unlikely Amid Deficit Concerns

Arthur Hayes, co-founder of BitMEX, doubts the U.S. will increase its Bitcoin holdings due to its deficit status. He critiques the political implications of openly buying more Bitcoin while referencing President Trump’s recent executive order. Other experts reflect similar sentiments, warning of a rush amongst nations. Hayes remains confident in Bitcoin’s market dominance, predicting a return to a bullish trend and potentially reaching prices up to $1 million.

In a recent interview dated May 1, Arthur Hayes, co-founder of BitMEX, voiced scepticism about the U.S. government’s intentions to bolster its Bitcoin reserves. Currently, the U.S. holds 198,012 Bitcoin—valued at over $18 billion. Hayes argued that, given the nation’s deficit state, it seems improbable for the government to increase its holdings. He noted, “The only way they can establish a Strategic Reserve is by holding onto the Bitcoin they’ve already acquired.”

Moreover, Hayes suggested that the prospect of the U.S. openly buying Bitcoin is unlikely due to political repercussions. He pointed out that announcing such an acquisition publicly would be challenging for elected officials, particularly given the prevailing stereotype of so-called “Bitcoin bros”. Hayes questioned if that was the image the U.S. wanted to promote.

The situation has gained attention since President Donald Trump signed an executive order in March to set up a Bitcoin reserve. This reserve largely comprises Bitcoins seized from criminal enterprises, which adds another layer of complexity to the discussion surrounding the government’s approach to digital currency.

Other crypto experts share Hayes’ viewpoint. For instance, Sergej Kunz—co-founder of 1inch—asserted that if the U.S. decided to buy Bitcoin, it might lead other countries to jump on the bandwagon, potentially igniting a rush for the digital currency. This could result in increased competition among nations looking to accumulate Bitcoin.

Despite the reservations about government purchasing, Hayes remains optimistic about Bitcoin’s position in the market, particularly in relation to altcoins. He predicts that Bitcoin will enter another bull phase, similar to what was observed in 2021, and anticipates the digital asset’s market dominance to hit around 70%. As of now, Bitcoin’s dominance stands at 64.78%, slowly climbing since the start of 2023, which certainly catches the attention of many investors and analysts alike.

Interestingly, Hayes’ recent insights came during a discussion about the price potential of Bitcoin, where he suggested that it could reach astounding figures, such as $1 million. These bold predictions indicate a strong faith in Bitcoin against the backdrop of ongoing market developments.