Martins Benkitis, co-founder and CEO of market maker Gravity Team, believes that any digital asset stockpile, as suggested by an executive order from U.S. President Donald Trump, should start with Bitcoin as its foundation.
Altcoins in U.S. Digital Asset Stockpile Carry Risks
While an executive order signed by U.S. President Donald Trump is somewhat vague on the creation of a national digital asset stockpile, Martins Benkitis, co-founder and CEO of market maker Gravity Team, is clear about what should be the key asset in that stockpile. According to Benkitis, any digital asset stockpile “should begin with Bitcoin as the foundation.” He said this applies to any country contemplating the creation of a digital asset reserve.
In January, suggestions that the U.S. government was considering including cryptocurrencies beyond Bitcoin in its digital asset stockpile sparked controversy within the crypto community. Bitcoin maximalists, irked by the idea, targeted Ripple CEO Brad Garlinghouse, whom they blame for persuading the Trump administration to shift its narrative from a Bitcoin-only reserve to a broader digital asset stockpile.
Some have interpreted the switch to the digital asset stockpile narrative as an indication that the Trump administration will likely include other digital assets. While Benkitis acknowledges that other digital assets can be included in the stockpile, he advises that this should be done later and in a phased manner. The CEO compares this approach to the one taken by the U.S. Securities and Exchange Commission (SEC) when it introduced cryptocurrency exchange-traded funds (ETFs).
Before considering ETFs for other digital assets, the SEC focused solely on Bitcoin ETF applications. Only after the approval of the first Bitcoin ETFs did the commission begin considering ETF applications for digital assets such as Ethereum (ETH), Solana (SOL), and others. However, Benkitis warns of a possible spike in volatility should the U.S. government decide to include other assets in the stockpile.
“If they widen the net, liquidity will get a major boost across multiple assets, and we could see volatility pick up as the market adjusts to what gets included. Some assets could rise overnight just on the speculation of being part of the US reserve. Market makers would need to be sharp in adjusting spreads and managing exposure across assets,” Benkitis said.
On Trump’s newfound affection for crypto and its likely impact on markets, the CEO said he is in agreement with those who believe this will cause demand for “deep” liquidity to surge. This, in turn, means market makers will need to “scale up” liquidity operations across different jurisdictions to ensure markets remain deep and stable.
Retail Investors Dominate Emerging Markets
In his written responses to a wide range of questions from Bitcoin.com News, Benkitis stated that market makers, including Gravity Team, would have to optimize their respective hedging strategies to handle large price swings.
Turning to the structure of markets in developed and emerging economies, Benkitis, who is also an expert in Asian markets, noted institutions’ dominance in regulated markets. According to him, retail investors only account for an insignificant share of the market. In contrast, retail investors appear to dominate in emerging markets in Southeast Asia (SEA) and Latin America, where volatile local currencies are driving residents toward stablecoins.
Meanwhile, as the Trump administration shifts the U.S. away from the seemingly anti-crypto stance adopted and championed by the Biden administration, Benkitis emphasized the importance of setting clear rules; otherwise, “institutions won’t fully commit.” Governments and regulators should also consider striking a balance between supporting innovation and regulating the industry.
On stablecoins, Benkitis urged the Trump administration to establish a robust regulatory framework, which would enable the U.S. to dominate the global stablecoin market.
