Will Governments Become the Biggest BTC Whales?

[Mpamaegbu]

This is the part that saddens me with the fundamentals of various government trying to come into this industry, the El Salvador story and the proposed plan of the US according to the campaign promises of Donald Trump to make Bitcoin foreign reserve. Anything government comes into most times won't favour the masses. There will be a lot of price manipulation. Government has money to throw around once there's an aim to achieve. Government won't mind selling at a loss once doing that frustrates their target or jeopardizing taxpayers by buying at ridiculous high prices when clearly not necessary. I won't be joyous once various governments begin to rank top hodlers of Bitcoin.

[Spaceman1000$]

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

I don't really understand what you mean by geopolitical Bitcoin wars, as for the decentralized nature of Bitcoin, it cannot be changed or manipulated, come to think of it, political leaders are not even interested investment in cryptocurrency because of the duration of time it will take before it starts yielding profit, most political office holders are interested in investment that will give quick cash especially when they are still in office, however the decentralized nature of Bitcoin limit's their corruption activities, so they really wouldn't give it second thought.

[Taskford]

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

They possibly can do that especially if they make Bitcoin reserve to happen. They could buy a lot of volume then defeat those big institution for acquiring large volume of Bitcoin.

That's why there's a concern that this reserve plan is somehow dangerous since government might find something useful to them and they became the number one manipulator which is bad on the ecosystem also for people who hold Bitcoins.

I'm also confused about geopolitical Bitcoin war word maybe try to explain it on simple terms so that people could get your point on what you are saying here.

[Mrbluntzy]

Bitcoin is decentralized and can never cause war in any form between the countries that wants to acquire more of it, and despite that the governments are getting interested and wanting to buy a large amount of Bitcoin, it doesn't affect the  decentralized nature of Bitcoin and it will not already prevent other small investors from buying Bitcoin from themselves too.

[Free Market Capitalist]

Probably. Now that bitcoin is expensive, the only ones who can buy large amounts are basically governments, because they can even print the money they need to buy it.

That's why there's a concern that this reserve plan is somehow dangerous since government might find something useful to them and they became the number one manipulator which is bad on the ecosystem also for people who hold Bitcoins.

I do not share this pessimism. If governments want to ban it, too bad, if they want to buy it, too bad. Governments will do what they see fit, not what certain bitcoiners want.

[SensitiveEyes]

Bitcoin wars sounds dramatic. If countries mine Bitcoin to become the biggest whales why should it cause geopolitical problems. Every country follows its own path. Let Russia, El Salvador and others do as they please with their Bitcoin plans.

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

[SquirrelJulietGarden]

Probably. Now that bitcoin is expensive, the only ones who can buy large amounts are basically governments, because they can even print the money they need to buy it.

Bitcoin Spot ETFs, companies like Strategy (MicroStrategy), and surely governments like El Salvador, Bhutan then bigger and richer countries like the USA. Governments have power to print money if they want, but they'll never announce that they are printing more money because of their plans to purchase more bitcoins.

So far mostly they have mass bitcoins from seizures in the past when Bitcoin price was very low.
https://newhedge.io/bitcoin/government-treasuries

[moneystery]

it may lead to more centralization of bitcoin. especially since the government has more resources to allocate compared to the average investor. this will make the price of bitcoin likely to increase significantly and make more people chase to own bitcoin because of its very good value. but this may not happen in the near future. maybe 2 more cycles until it happens. so if there is an opportunity to buy now, one should not delay it any longer because the bitcoin market is growing now and it is still affordable for the average investor.

[Macabury]

Probably. Now that bitcoin is expensive, the only ones who can buy large amounts are basically governments, because they can even print the money they need to buy it.

If this ever happens then the masses will suffocate with the worst form of inflation ever. The be any government who has the interest of it's citizens will do is rather sell their reserves to buy some bitcoin or preferably take a long term loan from the bank and pay back during the bull run.

The vast majority of currencies are in the hands of ordinary people, the number of bitcoins held by nations is very, very small, to have control of the currencies they have to buy from you, from me, from all ordinary people... mining is the same thing, to have total control you need a lot, a lot of money... and even the governments themselves would not be interested in the currency being centralized, that would end one of the great foundations of bitcoin.

Crypto like any other currency can be bought over by the government if they wish to. Imagine selling national reserves just to acquire as much Bitcoin and other crypto currencies as possible. The can even manipulate price so holders will be tempted to sell and this the reduce the amount held by the masses and try to see how things get slightly centralised even while maintaining the protocol of the respective Blockchain each of this coin exists in.

[$weetne$$]

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

Some government are already among the biggest Bitcoin whales but the whales in the market can not be only the government as there is always going to be some individuals and companies that will be among the whales. The more a few people own more Bitcoin, there is always going to be the fear of manipulation happening in the markets because some of them can decide to sell or fake sell to create panic in the market and this will cause the price of Bitcoin to fall and when that happens it will make the trust in Bitcoin to begin to be reduce for sometime because people will begin to see Bitcoin as as tool used by the governments but this will not last because the people will get use to the governments manipulating the price that it would not work again when they try the same tricks.

[DPHOR]

There would be no war but lack of supply and as we know whatever that has higher demands often inflates in price, therefore if more country or nation uses Bitcoin as a reserved funds you would see Bitcoin becoming difficult to acquire as the price could be too high to purchase and, no Bitcoin could be printed when supply are extremely low and demand is higher. I believe with time this may likely happen as Bitcoin is moving to that phase where government would have no options than join the chorus.

[Pi$$]

There would be no war but lack of supply and as we know whatever that has higher demands often inflates in price, therefore if more country or nation uses Bitcoin as a reserved funds you would see Bitcoin becoming difficult to acquire as the price could be too high to purchase and, no Bitcoin could be printed when supply are extremely low and demand is higher. I believe with time this may likely happen as Bitcoin is moving to that phase where government would have no options than join the chorus.

Need to also look at the manipulation probability if different governments begin to accumulate Bitcoin as reserves, El Salvador already holds good amounts, the US government will soon if all manifestos are brought into consideration by Trump, this will make the US country one of the most highest body to hold Bitcoin. If more and more governments follow the lead from Trump, the market circulation flows within governments causing easy manipulation in the market, by then the government will not be seeking any interest or harm it will cause to mere investors who are not part of the whales.

[suzanne5223]

Some governments (like El Salvador and Russia) are moving into bitcoin mining.

The government move or support of Bitcoin mining help the ecosystem but most of the government that make this move only do it to increase their tax income not for having enthusiasm in Bitcoin.

If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

This could lead to geopolitical Bitcoin since country like the US, and the China are always battle for supremacy in the ecosystem they both engage in. Aside from that, we should also expect a huge manipulation in the market price because they only join the market to make profit out of it not for the love of the technology.

[Darker45]

Time will come governments will become the biggest Bitcoin whales. This is not a matter of if. But it isn't just mining that will make them so. After all, they own the money-printing machines. If Bhutan accumulated so much Bitcoin by honestly earning it via mining, the US could just print money out of thin air and use the proceeds to buy Bitcoin. If this happens, other governments will certainly follow. As a matter of fact, as early as now there are already countries silently buying Bitcoin.

Price stability won't be a result of this. If the market is dominated by whales, it will create volatility more than stability.

[Smack That Ace]

That's why there's a concern that this reserve plan is somehow dangerous since government might find something useful to them and they became the number one manipulator which is bad on the ecosystem also for people who hold Bitcoins.

On the contrary, from what I see, everyone is excited about the government's plan to make bitcoin a national reserve because it will positively impact the price of bitcoin. I don't see anyone complaining or expressing concern about how this will affect the bitcoin ecosystem because all people care about is the price of bitcoin, nothing else.

I'm also confused about geopolitical Bitcoin war word maybe try to explain it on simple terms so that people could get your point on what you are saying here.

I think OP is talking about the war for bitcoin like the great powers are waging war for mineral resources like oil, rare earth...But I don't think that will happen because bitcoin is not a mineral resource and is not an important asset for countries. Many countries don't even care about bitcoin like China, how can there be a war just because of fighting over bitcoin?

[hero_the_bossman]

Time will come governments will become the biggest Bitcoin whales. This is not a matter of if. But it isn't just mining that will make them so. After all, they own the money-printing machines. If Bhutan accumulated so much Bitcoin by honestly earning it via mining, the US could just print money out of thin air and use the proceeds to buy Bitcoin. If this happens, other governments will certainly follow. As a matter of fact, as early as now there are already countries silently buying Bitcoin.

Price stability won't be a result of this. If the market is dominated by whales, it will create volatility more than stability.

Governments won't open up their printers just to speculate on BTC, imo.

It would be a very controversial move from them.

It's one thing when it's done for loans and such, and it's another when you go into the speculative asset (in their minds, that is).

[EarnOnVictor]

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

I don't know where you read that the Russian government is mining Bitcoin, all I know is that people in Russia are free to mine, unlike the stringent policy Putin wanted to enforce until the Western sanction made him rethink.

Let's even assume that the government is mining Bitcoin, do you think they will allow a decentralised system to hold their centralised power and drive? Putin, for instance, is an authoritarian, he will only take the benefits from Bitcoin by investing in it and for freer cross-border trades but will never allow it to reduce his control of power and resources.

[john_egbert]

Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?

I don't know where you read that the Russian government is mining Bitcoin, all I know is that people in Russia are free to mine, unlike the stringent policy Putin wanted to enforce until the Western sanction made him rethink.

Let's even assume that the government is mining Bitcoin, do you think they will allow a decentralised system to hold their centralised power and drive? Putin, for instance, is an authoritarian, he will only take the benefits from Bitcoin by investing in it and for freer cross-border trades but will never allow it to reduce his control of power and resources.

Yeah, even if it may be done, it would be done so only to avoid sanctions / etc. Business stuff.

[ThemePen]

Time will come governments will become the biggest Bitcoin whales. This is not a matter of if. But it isn't just mining that will make them so. After all, they own the money-printing machines. If Bhutan accumulated so much Bitcoin by honestly earning it via mining, the US could just print money out of thin air and use the proceeds to buy Bitcoin. If this happens, other governments will certainly follow. As a matter of fact, as early as now there are already countries silently buying Bitcoin.

Price stability won't be a result of this. If the market is dominated by whales, it will create volatility more than stability.

That is very interesting idea about what might happen to Bitcoin in future. It is probably going to happen that governments will start playing big role in Bitcoin market and that will have big effect on value of Bitcoin like we can see that how US Government is acting on Bitcoin value. Like you said governments can print more money and they will use it to buy Bitcoin so this can make more people want to buy it and because of this price go up and down. It is also interesting that some countries might already be buying Bitcoin in secret. If governments do start buying a lot of Bitcoin it is hard to say what will happen to market but it is likely that price will be unstable.

[fikrett]

That is very interesting idea about what might happen to Bitcoin in future. It is probably going to happen that governments will start playing big role in Bitcoin market and that will have big effect on value of Bitcoin like we can see that how US Government is acting on Bitcoin value. Like you said governments can print more money and they will use it to buy Bitcoin so this can make more people want to buy it and because of this price go up and down. It is also interesting that some countries might already be buying Bitcoin in secret. If governments do start buying a lot of Bitcoin it is hard to say what will happen to market but it is likely that price will be unstable.

I don't think they would bite the hand that feeds them (being the fiat, to turn it into BTC), though, maybe, some of the countries may do something like that, but on a very small scale.