The promise of freedom from centralized entities like governments(China and the US), banks, and other financial institutions fuels the entire cryptocurrency world. Bitcoin’s technology is undoubtedly sophisticated enough to take care of itself; however, the government’s increased stimulus plans have continued to raise issues.
In general, bitcoin maxis and the cryptocurrency community are increasingly becoming concerned about the continued uptake of Bitcoin by larger economies like China and the US. Through the DOJ, the US government currently holds more than 200k Bitcoin, making it the leading country in BTC holdings despite needing clear backing for the course.
Unlike the US, the Chinese government has repeatedly shown clear intent to own BTC. The Chinese government is the only country rivaling the US in the number of BTC holdings. With approximately 190k Bitcoins, the two countries are positioning themselves as custodians of Bitcoin, raising questions about true decentralization.
Potential Threats China and the US pose to Decentralization.
Bitcoin thrives on decentralization and freedom for its users. When large economies like the US and China continue to amass Bitcoin, there is a potential threat to centralize holdings, undermining the decentralized nature of cryptocurrencies in general.
Additionally, the mass adoption of Bitcoin by authorities like China and the US can significantly impact regulation. The regulatory influence of these governments can hinder the natural growth of these cryptocurrencies. Continued adoption of Bitcoin by China and the US can create stricter regulations that can easily affect its use and distribution.
Additionally, government involvement can easily shape mass opinion and alter market dynamics that are seemingly happening organically at the moment. Governance concerns can also become significant when different independent countries challenge the primary principles of decentralization.
According to Blockworks Tweet, the DOJ has a lot of Bitcoin and might be planning to sell a large chunk of it. The tweet sparked a debate on Twitter, with many Americans expressing their discontent. Some crypto enthusiasts mentioned that the DOJ did not receive the enormous Bitcoin holdings legally, while others noted that Americans should at least get a share of what the government currently holds in BTC.
Despite these sentiments, it is clear that Bitcoin still remains the pillar of cryptocurrencies and demonstrates the potential to revolutionize the financial scene. Looking at the maximum supply of Bitcoin (21 million), the current holdings by governments are negligible. The Top ten countries holding Bitcoin are the USA, China, the UK, Germany, Ukraine, El Salvador, Finland and Georgia. These countries hold 566,277 Bitcoin, with a current market value of $38,755,796,139. Out of the 21 million Bitcoins, these ten countries hold 2.697% of the total supply as of March 2024. These figures, however not threatening, should shed insight into the possible increase in BTC uptake by governments like China and the US, threatening decentralization.
