The U.S. government’s decision to maintain a Bitcoin-only strategic reserve is raising questions about its long-term viability and potential implications for market fairness. Pro-XRP lawyer, Bill Morgan argued that as other cryptocurrencies outperform Bitcoin, the policy could pressure the government to adopt protective measures that favor Bitcoin over a free and competitive crypto market.
Market Risks and Bitcoin’s Role in U.S. Reserves
The central concern stems from the possibility that assets in the broader cryptocurrency market could outperform Bitcoin. If that happens, investors may shift their holdings to higher-performing digital assets, potentially devaluing the U.S. Bitcoin reserve in comparison to a more diversified crypto portfolio. This scenario could lead to a weaker strategic position for the U.S. relative to countries with broader crypto holdings.
Morgan suggest that without a mechanism for adjusting its holdings, the U.S. reserve could lag behind other nations that take a more flexible approach. Countries with diversified reserves may see their holdings grow in value, creating an imbalance that puts the U.S. at a disadvantage.
Potential for Market Protectionism
As the U.S. maintains its Bitcoin-focused strategy, some industry observers worry that policymakers may introduce measures to protect Bitcoin’s standing in the domestic market. This could involve regulatory advantages or economic incentives aimed at reinforcing Bitcoin’s dominance, raising concerns about market protectionism.
The debate highlights a broader challenge for the U.S. government: balancing its commitment to Bitcoin as a strategic asset while ensuring that its policies do not distort market competition. Whether officials will adjust their approach or double down on Bitcoin remains an open question as the global crypto landscape continues to evolve.
