When a decentralized asset is increasingly absorbed by 'centralized giants', should we rejoice that it has finally entered the mainstream, or remain vigilant that it is straying from its original intent?
In May 2025, an intriguing piece of data is stirring waves in the crypto community: over 8% of the circulating Bitcoin supply has been locked by governments and institutions. Although this proportion has not reached a dominant absolute value, it is enough to stir the market's sensitive nerves. People are beginning to question whether Bitcoin is heading toward a brand new trajectory of fate—Is it being legally collected as digital gold by global governments? Or is it being pushed toward another extreme of financial centralization?
I. Bitcoin: From Anti-System to 'National Treasure'?
Bitcoin was originally synonymous with decentralization, representing a challenge to the traditional financial system. However, in the past year, the situation has changed dramatically. The holdings of institutions and nation-state players have continuously risen, completely breaking the old pattern of 'decentralized players dominating'.
Traditional financial giants like BlackRock and Fidelity, and even some sovereign wealth funds and central banks, have clearly included Bitcoin in their asset allocations. Statistics show that governments and institutions currently hold over 2.2 million Bitcoins—while the total supply of Bitcoin is only 21 million.
What kind of concept is this?
Of all the BTC in the world, about 1/12 is controlled by a few centralized entities with significant influence.
This is just the official data. The real issue is: what we can see is likely just the tip of the iceberg.
II. Strategic Considerations Behind Government 'Hoarding' of Coins
From multiple perspectives, the entry of governments and large institutions is not accidental, but a strategic deployment under a macro game:
✅ Inflation Hedge:
Faced with the continued depreciation of fiat currencies in various countries, especially in high-inflation countries like Argentina and Turkey, governments are incorporating Bitcoin into their foreign reserves as a hedging tool.
✅ Dollar De-dollarization:
In the context of an increasingly fragmented global financial system, Bitcoin has become an alternative path for certain countries to bypass the dollar settlement system and the SWIFT network, especially attractive to sanctioned countries.
✅ Diverse Reserves:
Against the backdrop of increased volatility in U.S. treasuries and gold, some sovereign funds are beginning to diversify part of their reserves into crypto assets to hedge against systemic risks in the traditional financial system.
✅ Legitimacy Transmission:
As pension funds, publicly traded companies, and other 'conservative' capital gradually allocate BTC, it sends a strong signal—Bitcoin has entered the mainstream asset pool. Market confidence has also risen accordingly.
This is precisely the turning point for the crypto market and the greatest test for the concept of decentralization.
III. Centralization Concerns: More terrifying than 'whales' is the state machinery.
Despite Bitcoin being included in the asset allocations of more and more institutions, it has also brought about new structural problems:
❗Decentralization Risk:
The original design concept of Bitcoin is 'anyone can freely participate', not 'controlled by a few major institutions and countries'. Once most BTC is held in a very few wallets, risks such as market manipulation, collusion in pricing, and policy influences will become more realistic.
History tells us that governments can easily confiscate gold during economic crises or wars (refer to the 1933 U.S. Gold Confiscation Act). Therefore, when Bitcoin reserves reach a 'national interest' level, is it still free? This is a question that needs to be asked repeatedly.
❗Liquidity Exhaustion:
Institutions usually store Bitcoin in cold wallets or third-party custodians, keeping it out of circulation for long periods. This directly leads to a reduction in the available BTC supply on the market, exacerbating the volatility of prices—just a small amount of buying or selling can create huge waves.
IV. What do we need? Not panic, but smarter choices.
In the face of this pattern, can ordinary investors only watch as Bitcoin is 'swallowed by whales'? Not necessarily; those who truly stand out in this pattern are the ones who understand how to equip themselves with data and tools.
For example, platforms like [Mlion.ai] are becoming the 'new weapon' for smart investors:
✅ On-chain address analysis helps you identify changes in holdings by large holders/governments/institutions;
✅ Price prediction feature, combining on-chain + off-chain + sentiment signals, provides more forward-looking trend judgments;
✅ AI research reports, generating in-depth analysis reports on institutional movements regarding Bitcoin with one click, allowing you to easily grasp the latest developments;
✅ In-depth interpretation of news, understanding the true intentions behind an institutional transfer, no longer being deceived by appearances.
Institutions have entered the market, but that does not mean retail investors are out. On the contrary, it is precisely because 'whales are turning over in the water' that we need radar systems to avoid being overwhelmed by tidal waves.
V. Conclusion: The legalization of Bitcoin is a double-edged sword.
Bitcoin is accelerating its process of 'financialization'; it has become a reserve and hedging asset for countries, and also a pawn for institutional players. In this process, we see legitimacy, but also compromise.
True believers in crypto should embrace development while remaining clear-headed. Bitcoin should not become just another 'metal captured by regulation' but should maintain its most original spirit: openness, freedom, and independence.
📌 Our current task is not to question the future of Bitcoin but to be ready to coexist with it in a more complex and realistic world.
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Disclaimer: The above content is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is risky; invest with caution!