Bitcoin as a US Reserve Asset: A Boon for Price, But a Risky Bet, Charles Hoskinson

Notably, based on the current price valuation, that would amount to a staggering $242 billion. Charles Hoskinson, co-founder of Cardano, says the development would be a double-edged sword for Bitcoin if that happens.

Centralization: A Threat to Core Bitcoin Principles

According to Hoskinson, making Bitcoin the reserve asset of the U.S. exposes the digital asset to centralization risks. A notable benefit of Bitcoin lies in its decentralized supply distribution, which guarantees the cryptocurrency remains secure and tamper-proof.

“…It means that if things happen the US disagrees with because it has a strategic interest in the asset, it may use its geopolitical power to change that. So be careful who you welcome in, and be careful of the powers of those people,” Hoskinson stated.

Potential Price Surge: A Double-Edged Sword

Hoskinson maintains that in the broader financial market, if a single individual or company buys up, say, 20% of the world’s oil supply, it would be viewed as a cartel. He suggested that traditional models should refrain from gaining a foothold in the crypto ecosystem, with an emphasis on the industry’s decentralization.

Hoskinson also acknowledged the positive effect of such a move on the price of Bitcoin. According to him, making BTC a reserve asset would serve as a price catalyst, given that the digital asset would receive favorable regulatory support.

However, the Cardano co-founder believes that with the recent approval of Ethereum exchange-traded funds and Bitcoin ETF, cryptocurrency has come to stay and will open access to institutional and retail investors.

Hoskinson Predicts ETF Proliferation

Hoskinson also believes that various crypto ETFs will soon flood the market as traders on Wall Street stand to profit from such moves. He insists that ETFs will develop organically, and no amount of regulatory hurdles will stop people from creating or buying financial products. He hinted that Cardano would join the train at the launch of the ADA ETF.