The Executive Director of the President's Council of Advisers on Digital Assets of the White House, Bo Hines, has recently disclosed that the United States government wants to acquire as much Bitcoin as possible.
This is a bold statement that solidifies what we've been discussing for years. The government and institutional takeover is no longer a speculation, it's now in active process, executed strategically.
What is interesting is that these government officials understand the urgency of securing as much Bitcoin as currently possible and quite frankly don't shy away from exposing that the asset is in a class of its own, not just from other traditional assets but also from other crypto assets.
US President Donald Trump’s crypto liaison has confirmed that the administration is still keen on a strategic Bitcoin reserve, despite only briefly being mentioned in a recently published crypto policy report.
“We understand the importance of the strategic Bitcoin reserve, we’re enormous fans of Bitcoin and the Bitcoin community, we want to deliver for them as well, and I’m certain that we will.”
When asked how much Bitcoin the federal government has, Hines said, “I can’t discuss that right now.”
“There are several reasons we’re not disclosing that right now, there might be a time when we do, but I will say we want as much as we can possibly get [...] and we’re going to continue to work on that.”
“We have it, it’s been established [...] we also have the strategic national digital assets stockpile,” he said, adding that Bitcoin is in “a class of its own and everyone recognizes that.” – Cointelegraph report
What does this mean for Bitcoin and crypto at large?
In short, it means that the government recognizes the significance of Bitcoin and crypto assets as economic value flow moves on-chain.
We can hate the idea of the government owning that much Bitcoin but at the same time want it, especially as a US citizen.
We've seen proposals such as Bitbonds for the accumulation of Bitcoin for the strategic reserve, so it's to be expected that at some point, this is going to happen.
Yet, even if it doesn't, institutions are still going to eat up the asset's available supply. This is all happening in real time with Strategy leading in accumulation frequency.
Given that these are regulated entities, their stash becomes subject to government oversight, meaning that even if the government doesn't directly acquire Bitcoin, it would still control its utility when institutions control the majority stake.
Fact is, this will not be unique to Bitcoin. Ethereum's Ether (ETH) is one other crypto asset one can expect institutions to take over. So long as TradFi dominates liquidity, it will always be able to acquire a significant stake in any network or ecosystem.
The key to avoiding centralization of on-chain economies is to find ways to disincentivize it, either by deploying strategies that encourage self custody, solo mining or staking (where applicable) or by simply designing counter measures for potential economic attacks stemming from pooled investment capital or simply growing dominance of specific players.
Contrary to popular beliefs, both proof of work chains like Bitcoin and proof of stake networks like Ethereum will suffer governance attacks if institutions can easily acquire and leverage significant native asset supply.
The mode of execution is all that's different. With proof of stake, it is pretty direct because stake is how governance is influenced and with proof of work, if buying away the miners or solo-increasing hash power proves too expensive, attacking their revenue becomes the choice of execution because abstracting away on-chain volumes will kill fee-base revenues, forcing miners to move away due to unprofitability.
We are in interesting times. Whoever thinks we've won doesn't quite understand what's coming. The game isn't even about winning anymore, it's about having the advantage, which can afford us freedom and that is a continual process.