Some governments (like El Salvador and Russia) are moving into bitcoin mining. If more nation-states accumulate BTC, what impact will this have on decentralization and price stability? Could this lead to geopolitical bitcoin wars?
I do not think so. Even if government were to own at least a substantial amount of BTC in the market, there are still factors that are present that counters inflation and total price control from these entitites.
Remember that BTC is a deflationary crypto with its limited supply of 21 million (which is expected to be fully mined by the year 2140). Basing from its price history alone, the trend of its price is upwards- meaning, its price continues to rises as coins are being mined each year. With dozens of forks happening, this translates to volatility. I really doubt that the price of BTC would be stable in the market. I mean, that is what makes BTC so attractive to investors- you can either profit/lose money in a relatively short amount of time.
Countries can accumulate Bitcoin to become whales. They would be laying foundations for future generations to have an improved way of life than their forefathers. Only in future if their BTC has fiat value will we say it was successful gamble but more countries would have to legalise Bitcoin as a tender.
It won’t be bad for them to accumulate more bitcoin but the thing is they are even among the lowest Bitcoin holders among countries which hold Bitcoin even as they made it a legal tender, their resources won’t allow them to have much more compare to what other countries have acquired through seizure, price increase is not only attached to countries having more bitcoin, as that have more negative effect than positive one.
I would also agree on your statement. I do believe that if a certain entity controls majority of the supply in the market, they can at least have a big contribution to its price manipulation in the market. But from the experience of many over the years, I guess this will not do as big damage as some thought of.