Trump's value in a strategic reserve in WBTC is quite questionable!
If the U.S. government truly wanted to build a serious strategic reserve in #Bitcoin, the only logical option would be to buy real Bitcoin, directly on the Bitcoin blockchain. However, the recent news that Trump intends to acquire Wrapped Bitcoin (WBTC) instead of BTC raises serious questions.
WBTC is not real Bitcoin. It is a token on the Ethereum blockchain that represents Bitcoin but relies on a centralized entity, BitGo, to ensure that each WBTC is actually backed by a real BTC. In other words, whoever controls BitGo has absolute power over these “wrapped bitcoins.” They can be frozen, confiscated, or even disappear if the company claims to have suffered an attack or declares bankruptcy.
The obvious question is: why isn’t Trump buying real Bitcoin? The most plausible answer is that this move opens the door to market manipulation and financial schemes that benefit insiders at the public’s expense.
How the Pump & Dump Scam with WBTC Works
If a U.S. president announces that the government is buying Bitcoin, the market reacts immediately. Prices surge. But what if, in reality, the purchase isn’t of real Bitcoin, but instead of a synthetic token like WBTC?
The trick lies in liquidity and the ease of manipulation of WBTC. If Trump and his allies have influence over BitGo, they could simply mint more WBTC without necessarily having 100% of real Bitcoin as collateral. As long as the public believes that WBTC and BTC are fully equivalent, the token’s price will continue to rise.
Now, let’s look at the typical Pump & Dump scenario:
1. Announcement of Bitcoin purchase – The U.S. government claims it is buying Bitcoin for its strategic reserve. The market goes into euphoria. BTC’s price rises, and since WBTC is pegged to Bitcoin’s price, it rises too.
2. Artificial creation of WBTC – BitGo can increase the supply of WBTC based on market confidence, without necessarily having 100% real Bitcoin as immediate collateral. This allows insiders to accumulate large amounts of WBTC before the public catches on.
3. Mass sell-off at the top – Once the price has risen enough and insiders have positioned themselves, they begin dumping WBTC on the market, converting it into dollars or real Bitcoin. Since WBTC is a centralized asset, they can even create obstacles for converting it back to BTC, trapping investors in a depreciating asset.
4. Sudden market crash – As the mass sell-off occurs, WBTC’s price plummets. Panic sets in, and retail investors, who bought at the peak, lose money while insiders walk away with profits.
The end result? Insiders get rich while the public foots the bill.
A Possible Attack on Real Bitcoin
But there’s an even more dangerous long-term effect. If the U.S. government treats WBTC as the “official Bitcoin,” it could serve as a Trojan horse to weaken real Bitcoin.
Imagine that, after some time, new regulations emerge stating that only WBTC is allowed for financial transactions because it offers “transparency and auditing.” This would create a barrier for using real Bitcoin, forcing businesses and investors to migrate to a version of Bitcoin that is centralized and controllable.
This would pave the way for a future where a “state-controlled Bitcoin” could be used as a financial control tool, removing the sovereignty and decentralization that make Bitcoin the only truly trustworthy monetary reserve.
Conclusion
If the real intention was to build a serious reserve, the solution would be simple: buy real Bitcoin, store it in secure cold wallets, and eliminate third-party risk.
By choosing WBTC, Trump and his allies are enabling market manipulation, financial speculation, and the potential confiscation of funds in the future. There is no legitimate technical or strategic reason for this choice.
Most likely, this is just another scheme to benefit a handful of insiders while deceiving the public with the illusion of government adoption of Bitcoin.
