Arthur Hayes, the ex-CEO of cryptocurrency exchange BitMEX, has criticized US President Donald Trump’s proposed Bitcoin Strategic Reserve (BSR), describing it as a pending political catastrophe. In the second part of his three-part essay series, The Genie, Hayes critiqued the idea of a federal Bitcoin stockpile as both misguided and dangerous.
Hayes argued that anything that can be bought can also be sold, cautioning that politicians could potentially manipulate Bitcoin’s price for short-term benefits. He also criticized Elon Musk’s Department of Government Efficiency (D.O.G.E), which he described as a hollow spectacle created to divert voters’ attention.
The idea of a Bitcoin strategic reserve was initially proposed by Senator Cynthia Lummis, who suggested the US government should purchase one million Bitcoins to establish a digital gold reserve. However, Hayes contends that such a move would not be beneficial to either Bitcoin or the US economy. He argues that the value of Bitcoin wouldn’t continue to rise simply because the government purchased it, and once the government buying spree stopped, the bull run would also end.
Hayes predicted that Bitcoin would be weaponized as soon as it entered government hands, and that a future political party could potentially liquidate the Bitcoin stockpile for funding social programs, defense budgets, or infrastructure projects. He also expressed skepticism about how seriously the US government would take its role as a Bitcoin custodian, predicting that politicians would likely treat Bitcoin as a trophy asset and abandon it when it no longer served their interests.
Turning his attention to cryptocurrency regulation, Hayes criticized what he calls the “Frankenstein crypto bill,” arguing that the current regulatory landscape is designed to benefit major centralized players like Coinbase and BlackRock, rather than supporting the builders of decentralized applications.
Despite his harsh criticism, Hayes did propose an alternative strategy, suggesting that the US should gradually devalue its Treasuries and transition to Bitcoin as a global reserve asset. He also highlighted America’s natural advantages in the Bitcoin mining industry, including its vast untapped energy reserves and its increasing domestic semiconductor production.
However, Hayes warned that America’s legal framework still treats Bitcoin as a second-class asset and called for legislation that protects public blockchains as a form of free speech. He also suggested integrating US dollar-backed stablecoins into social media platforms to embed the dollar into global commerce while gradually transitioning reserves into Bitcoin.
Hayes concluded with a strong warning: “If you’re waiting for politicians to save crypto, you’re screwed.” He urged the crypto community to fight for better regulations and a deeper understanding of the technology underpinning cryptocurrency, instead of relying on political favors.
