Bitcoin reserves have been labeled a “ticking time bomb” by Russian economist Valentin Katasonov, who is, at the time of writing, warning of a possible 50% bitcoin crash amid rising cryptocurrency market risks and also growing market volatility concerns.
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Russian Economist Predicts Bitcoin Crash Amid Market Volatility
Katasonov, who currently serves as the Chairman of the S. F. Sharapov Russian Economic Society, has cautioned against Russia developing national bitcoin reserves. The economist has also compared such initiatives to “laying landmines” in the economy, which could potentially trigger cryptocurrency market risks.
Katasonov said:
“[Talk about creating strategic crypto reserves] is a way of inflating bubbles. If the bubble bursts, everything will be fine as long as the economy holds up. But, regardless, there will still be many victims.”
Fifth Column Accusations
Bitcoin reserves supporters have faced harsh criticism from the Russian economist, who has, in recent statements, labeled crypto advocates as “fifth columnists” attempting to “undermine the country’s economic security.” This division also highlights growing cryptocurrency market risks within Russia’s economic circles right now.
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Central Banks Against It
The Russian Central Bank has, as of now, officially ruled out any Moscow-based bitcoin reserves. Additionally, Russia’s finance ministry has confirmed that the state will continue buying only gold and Chinese yuan for the foreseeable future.
However, the ministry has also suggested that if the National Welfare Fund’s liquid funds reach approximately 7-10% of Russia’s GDP, Moscow might perhaps consider “riskier” assets such as cryptocurrency reserves and bitcoin reserves.
Future Outlook
Despite these various warnings about bitcoin reserves potentially triggering a crash, interest continues to grow among several Russian lawmakers. Some officials are currently worried that failing to respond to Washington’s BTC stockpile plans would essentially surrender crypto sector leadership, which could also increase the market’s volatility.
Finance Minister Anton Siluanov said:
“The Treasury should accept that buying lower-risk assets would let Moscow earn less, but keep its powder dry.”
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For Russia, some of the decisions that were taken regarding bitcoin reserves will likely be influenced by both economic considerations and also cryptocurrency market risks, especially as the country continues to face sanctions and seeks alternative financial systems amid the ongoing market volatility that characterizes the current cryptocurrency landscape.