Rafique warned that any government holding a significant amount of Bitcoin would have the ability to manipulate its price by releasing assets into the market. Such actions would undermine Bitcoin’s fundamental role as a neutral, decentralized form of money.
He noted that while the idea of a U.S. crypto reserve currently enjoys bipartisan support, the outlook could change under a new administration.
“As circumstances evolve, concentrating large amounts of BTC on a country’s balance sheet could pose a liquidation risk,” Rafique said.
He cited Germany’s sale of roughly 50,000 BTC in the summer of 2024 as an example, which kept Bitcoin prices capped below $60,000 due to selling pressure.
Rafique further argued that establishing a U.S. strategic Bitcoin reserve could trigger broad macroeconomic consequences, the most significant being a loss of confidence in the dollar.
According to him, the formation of a national crypto fund would signal that the world’s reserve currency has weakened and can no longer rely solely on economic power to sustain its value.
This, he added, could shock the entire financial system, pushing investors toward safe-haven assets like gold or the Swiss franc while driving them away from riskier instruments, sparking a cascade of liquidations.
“Most likely, this would lead to a major crash, as markets react to a radical shift in the global financial system,” Rafique concluded.