BitMEX co-founder Arthur Hayes has strongly rejected the idea of a U.S. Bitcoin reserve, calling it a politically driven and impractical concept. In his essay “The Genie,” Hayes argues that state-backed Bitcoin reserves would serve political interests rather than ensuring financial stability.
Bitcoin Reserve: A Political Tool?
Hayes warns that politicians tend to acquire assets for short-term gains, stating, “What can be bought can be sold.” While some view Bitcoin (BTC) as the hardest form of money, he questions the U.S. government’s fundamental need for it. Rather than embracing Bitcoin’s ideological foundations, he believes that political leaders would exploit price volatility for their own agendas.
Criticizing Senator Cynthia Lummis’ proposal for a Bitcoin reserve, Hayes argues that if President Trump approved a purchase of one million BTC, prices would surge temporarily but decline once buying ceased. Furthermore, he predicts that if the administration fails to address major voter concerns—such as inflation, foreign conflicts, and corruption—Democrats could reclaim power in 2026. If that happens, they may view the Bitcoin reserve as a financial asset to fund new policies, creating uncertainty and undermining market confidence.
Could Bitcoin Reserves Be Used for Political Fundraising?
Hayes also questions whether the government would actively engage with Bitcoin infrastructure beyond holding it as an asset. “Will they run nodes? Sponsor developers? Or will they just use it as a political trophy?” he asks. He also accuses Trump’s administration of using Bitcoin’s volatility for political leverage, suggesting that the reserve could become a campaign fundraising tool.
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Another Issue: Regulatory Complexity
Beyond Bitcoin reserves, Hayes critiques the regulatory landscape, referring to new crypto legislation as a “Frankenstein bill.” He warns that any new framework is likely to be overly complex, favoring large financial institutions with the resources to comply while sidelining smaller industry players.
According to Hayes, investors with significant stakes in centralized finance (CeFi) will have the strongest lobbying influence, shaping regulations to serve their interests. Meanwhile, decentralized finance (DeFi) developers may lack the resources to advocate for fair policies.
Hayes argues that only firms with deep pockets, like Coinbase and BlackRock, will be able to afford regulatory compliance. Instead of fostering competition, he warns that such policies could entrench monopolies, stifle innovation, and drive entrepreneurs away from the U.S. crypto market.
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