Arthur Hayes, the co-founder of BitMEX, has strongly opposed the proposed US Strategic Bitcoin Reserve (SBR), calling it a misguided initiative.
In a Feb. 6 blog post, he argued that the reserve plan and a looming regulatory bill would do more harm than good for the crypto industry.
Argument against SBR
Hayes criticized the US government for accumulating Bitcoin as part of a national stockpile, a move some crypto advocates believe would legitimize the asset and boost its value.
He pointed out a fundamental flaw: any asset that a government buys can just as quickly be sold, particularly when political leadership changes.
He warned that a new administration could see the Bitcoin reserve as a financial lifeline and liquidate it to fund political initiatives.
He wrote:
“To an incoming Democrat-controlled legislature or Presidency, finding easy piles of cash to spend on goodies for their supporters is the first directive. It is the first directive of any politician, regardless of the political system in practice. There are one million Bitcoin just sitting there, ready to be sold; it just takes a signature on a piece of paper.”
Hayes also said that governments stockpile assets for political leverage rather than long-term financial strategy. If the US were to buy Bitcoin in large quantities, prices would likely surge. But once the buying stops, the momentum could fade, leading to market stagnation or downturns, he explained.
Beyond the economic implications, Hayes questioned whether the US government would engage with the Bitcoin ecosystem meaningfully.
He doubted they would contribute to development, support Bitcoin core engineers, or operate nodes. Instead, he suggested the initiative might serve as a temporary political stunt rather than a long-term commitment.
Hayes stated:
“Are they going to donate to sponsor Bitcoin core devs? Are they going to run nodes? Maybe … but the way the BSR is talked about, it appears to me to be a set-it-and-forget-it type of exercise. Trump and the Republican party can look at a mooning price of Bitcoin, claim mission accomplished.”
Regulatory concerns
Beyond the SBR, Hayes also addressed concerns about crypto regulation, aiming at what he called a “Frankenstein crypto bill.”
Hayes argued that the regulatory measures would likely serve the interests of established financial institutions rather than fostering innovation.
He pointed out that large investors in centralized finance (CeFi) firms wield the most influence in shaping policy. These entities, he warned, are likely to push for regulations that only they can afford to comply with, making it nearly impossible for smaller players to compete.
He wrote:
“From my vantage point – far away from the circus surrounding the genie – it seems that folks who own large stakes in centralized crypto financial intermediaries are most likely to have their crypto regulatory wishes granted due to the amount of noise they generate.”
Hayes also had a cautionary message for entrepreneurs hoping the US offers a stable regulatory environment. He warned that corporate giants would work to maintain their dominance by making compliance too costly for emerging businesses.
He added:
“The crypto regulatory wishes likely to be granted, if any are granted at all, will be in the form of overly complicated, prescriptive rules that only large and wealthy centralized companies can afford.”
If such a situation occurs, the BitMEX co-founder pointed out that it would create an industry dominated by monopolies while limiting the number of innovative startups.
Hayes concluded:
“To all you builders globally who are relocating to America because of a perceived crypto-friendly administration, take heed. If you tacitly support such an outcome, your startup is destined to fail. Monopolistic businesses cosseted by an impenetrable wall of gobbledygook regulations don’t look kindly on actual innovation.”
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