Russian Economist Criticizes Bitcoin Reserve Strategy as Risky
- Russian economist criticizes Bitcoin reserve strategy as risky.
- Concerns about Bitcoin’s volatility highlighted.
- Market analysts observe potential impact on Bitcoin’s market.
Russian economist warns on March 27, 2025, that using Bitcoin as a reserve asset poses significant risks, citing its extreme price fluctuations.
The warning underscores concerns about Bitcoin’s volatility affecting national and corporate financial structures, hinting at broader implications for its adoption as a reserve asset.
Russian Economist Warns Against Bitcoin’s Price Volatility
Russian economist, Dr. Alexei Kudin, stated that utilizing Bitcoin as a reserve could exacerbate financial instability. He emphasized that Bitcoin’s extreme price volatility poses a risk to economic stability.
Dr. Kudin’s comments followed recent discussions on adopting Bitcoin for reserves. The economist cautioned against relying on an asset known for rapid price swings and speculative trading.
Bitcoin’s Market Reaction: Price and Dominance Shifts
His remarks sparked debate among financial analysts, with some agreeing on the potential risks. Others believe Bitcoin’s store-of-value proposition still holds significant appeal for diversification.
Bitcoin, priced at $86,795.50 as of March 27, 2025, has shown a 1.79% increase over a week but a 10.03% drop over 90 days. Its current market cap is approximately $1.72 trillion, holding a 60.73% dominance in the crypto market, as reported by CoinMarketCap.
Volatility Warnings Recall 2017 Crypto Surge Risks
Similar warnings were issued during the 2017 crypto surge, where financial experts cited potential risks for institutional investors. Historical data points to Bitcoin’s price volatility during economic uncertainty.
Experts suggest that while Bitcoin’s role as a reserve asset grows, awareness of its volatile nature is crucial. Continued price fluctuation may deter large-scale adoption as a stable financial instrument.
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.
— Valentin Katasonov, Chairman, S. F. Sharapov Russian Economic Society
