Billionaire Predicts China & Russia Will Hold Trillions in Bitcoin

Dan Morehead, the visionary founder of Pantera Capital, has posited a compelling long-term forecast: a significant geopolitical shift in global reserve management that will inevitably lead adversaries of the United States, particularly China and Russia, to embrace Bitcoin on an unprecedented scale. Morehead anticipates these nations could eventually hold "trillions of dollars" worth of the digital asset, a monumental development he believes will unfold over the coming decades.

During a recent appearance on Blockworks’ Empire podcast, Morehead elaborated on his prediction, framing it as an integral part of a broader, longer-term rotation within global reserve assets. He views this movement as a direct response to the inherent sanction risks associated with holding large volumes of dollar-denominated assets. While acknowledging that this transformation will not be instantaneous, he suggested a timeline of "a decade or two." Interestingly, Morehead speculates that the initial adopters in this paradigm shift might include US-aligned Gulf states, setting the stage for what he terms "the big one" – the eventual entry of countries considered "antagonistic to the United States, like China or Russia."

Geopolitical Underpinnings for Bitcoin Adoption

Morehead’s argument is firmly rooted in the historical rhythm of reserve currency transitions and the inherent vulnerability faced by nations whose financial stability is tied to a rival's financial system. He highlighted the cyclical nature of reserve currencies, noting that "the reserve currency’s changed every 80 or 100 years… no one’s ever really lasted for more than, let’s call it 100, 110 years." This historical precedent suggests that the current dominance of the US dollar, while robust, is not immutable.

While conceding that it is "inconceivable that the dollar will be supplanted" overnight, Morehead issued a stark warning regarding the concentrated political risk borne by countries holding substantial US Treasury positions. He specifically cited China’s extensive portfolio, arguing that "it’s really pretty crazy to have your entire country’s life savings in an asset that your potential adversary could literally just cancel." From this strategic vantage point, he concludes that it is "inevitable" for such nations to begin accumulating Bitcoin and other cryptocurrencies as a means of diversifying their reserves and mitigating geopolitical risks within the next ten years.

Observable Shifts and Emerging Trends

Morehead's provocative prediction arrives amidst tangible shifts in how major economies manage their holdings of US debt. Official Treasury data for July 2025 indicated that China’s reported Treasury holdings stood at $730.7 billion, marking their lowest level since 2008 and a notable decline over the past decade. This reduction is often interpreted not as an abrupt abandonment but rather as a calculated, gradual diversification of reserves, moving away from an overreliance on a single currency system. While Japan remains the largest holder with approximately $1.15 trillion and the United Kingdom holds close to $900 billion, the broader pool of foreign-held Treasuries actually reached a record high in July. These nuanced figures underscore that while the dollar system retains significant depth and liquidity, China’s diminishing share at the margin illustrates the precise dynamic Morehead suggests could accelerate alternative reserve strategies over the long term.

The proposed timeline for this shift also aligns with a growing number of policy proposals globally that, if implemented, would normalize sovereign Bitcoin exposure. In a significant move in March, former US President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve and a national digital asset stockpile. Concurrently, Wyoming legislators have advanced a bill that would permit limited Bitcoin investments—capped at 3%—within certain state funds. This represents an incremental yet crucial step towards integrating digital assets into institutional reserve management at the state level, signaling a growing acceptance and exploration of cryptocurrencies within traditional financial frameworks.

Beyond the United States, Gulf governments are already actively experimenting with sovereign crypto exposure, lending further credence to Morehead’s thesis. The United Arab Emirates, for instance, has initiated state-backed mining operations and provided disclosures suggesting the accumulation of several thousand BTC on its balance sheet through these ventures. These early movements by US-aligned nations could indeed pave the way for broader adoption, offering a blueprint and a degree of legitimacy for other countries to follow suit.

Challenges and the Long Game

Skeptics naturally point out that the sheer magnitude of moving "trillions" of dollars into Bitcoin would necessitate not only fundamental policy shifts but also a robust market structure capable of absorbing sustained sovereign demand without triggering disorderly volatility. While Bitcoin's liquidity depth has seen substantial improvement with the advent of US spot ETF adoption and the expansion of derivatives markets, challenges remain. The cryptocurrency’s free float, existing custody frameworks, and cross-border payment rails still experience periodic stress, raising questions about scalability for nation-state level adoption.

However, Morehead frames his thesis within a protracted historical arc rather than as a short-term trading opportunity. He reiterated, "I don’t think it’s gonna happen overnight," emphasizing a horizon of "a decade or two" and outlining a phased progression. In this vision, US-aligned adopters would gradually pave the way for politically non-aligned states, who would increasingly prioritize Bitcoin’s inherent censorship resistance and sanction insulation capabilities. For countries like China and Russia, the driving force behind such a move would be as much strategic as it is financial. China’s gradual reduction of Treasury holdings aligns perfectly with its broader strategy of diversifying reserves into assets like gold, while Russia’s post-2014 and 2022 sanctions experiences have already compelled a dramatic overhaul of its reserve composition, making alternative, sanction-proof assets highly appealing. As of press time, Bitcoin traded at $112,639, reflecting its ongoing journey to becoming a globally recognized asset.