Why a Strategic Bitcoin Reserve Could Destabilize the Dollar and the Economy

Proposals for a U.S. Strategic Bitcoin Reserve, including Senator Lummis’ plan to acquire 1M BTC, risk undermining the dollar’s stability, alienating the public, and sparking financial chaos, argues Nic Carter.

The concept of a U.S. Strategic Bitcoin Reserve (SBR) has gained traction among Bitcoin advocates, with proposals like Senator Lummis’ BITCOIN Act suggesting the government acquire 1 million BTC over five years. Proponents argue this would strengthen the financial stability of the United States and hedge against economic uncertainty.

However, Nic Carter, a prominent voice in the cryptocurrency community, has voiced strong opposition to the idea. He argues that an SBR would not bolster the dollar but rather signal a lack of confidence in the current monetary system, leading to chaos in financial markets. Unlike countries like Russia or Iran, which might benefit from holding Bitcoin to avoid asset seizures, the U.S. issues the global reserve currency and has no strategic need for such a hedge.

Carter warns that purchasing large quantities of Bitcoin would be prohibitively expensive, potentially costing the U.S. government $1 trillion, and could cause bond market turmoil and skyrocketing interest rates. He also notes the political improbability of such a reserve gaining bipartisan support in Congress. Moreover, a unilateral executive order to implement an SBR could provoke public backlash, as it would be seen as a wealth transfer to Bitcoin holders, a small and already affluent group.

Carter highlights that the U.S. dollar’s dominance is underpinned by the strength of its economy, capital markets, and global trade leadership—not by commodity reserves like Bitcoin. He asserts that introducing Bitcoin into the monetary system would accelerate de-dollarization, destabilize the economy, and alienate the general public.

Instead, Carter suggests patience, as Bitcoin continues to grow as an asset class. Over time, its stability and market size may make it a more viable reserve asset, but the current monetary system is not in crisis, and there is no urgency to act.

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