Governments and banks fortunately do not hold 90% or even 50% of the crypto currencies. If you say that they hold 90% of the bitcoins, they would have stopped ordinary people from using it and keep the banking system in place forever.

It is highly impossible for this to happen even though this is their primary aim before they accept crypto. If this happens, they will continue to manipulate their economies as they are doing with their fiats. They won't have total control over the economy if they accept crypto.

There's 2 scenarios:
1. They keep the BTC in cold storage. This essentially removes 90% from the markets. With such little float, it would be incredibly simple to pump and dump bitcoin, unless it's priced at $100,000 and above
2. They do actively keep BTC in government trading accounts. This would allow any government official to conduct insider trading and enrich themselves in a day
Thankfully both scenarios are highly unlikely, governments are allergic to bitcoin

This is the worst thing that can happen to bitcoin, if 90% of bitcoin is owned by banksters and Government then manipulation is not far fetch in the ecosystem.

Who has money, he runs the game, that's how it works. In this harsh bear market, many average joes left the market and sold those holding to those elites. 

That's what we can observe now, I don't understand why there is so much excitement about getting instututional giants and bankers into bitcoin. Better adoption, more money from institutional investors flowing in etc.yes it's all happening now but is it really good? Will everybody be happy to know that PayPal, Grayscale, Square, some Wall street banks and few greedy hedge funds control the rest of the supply and price?
Big question if the project failing or not, it's not clear yet but there are some worrysome signs.

what now? BTC is "De Fecto" begin centralized. 

Thus Satashi's original vision in his white paper "decentralized peer-to-peer cash system" remains "De Jure" as it is a thing of the past, technically.

If deep state banking globalist cartel gain custodial control of 95% as part of strategic BTC reserve holdings, an motion for BIP shall be introduced by reason of necessity to subdivide each satoshi into smaller units,

like "mili satoshi" or perhpas "MicroSatoshi" are required to address divisibility to address real world micro-transactions issues, possibly due to successful activation of advanced side/off-chain solutions like graftroot or taproot.

Applying modern monetary theory so long the "velocity" of BTC as unit of account in real world circulation increases linearly or perhaps at a sub-quadratic growth, it will cause scarcity and this would cause rises in BTC valuation.

Due to the hard money nature of BTC, this effect can be difficult to contain.

Considering there are 328,000,000,000,000 yuan in total monetary supply, once unit of account reaches
100 million yuan per BTC it would require aggregate utxo private key holding to reach 3,280,000 BTC, which gave raise to question of practicality at such reserve amount.  As such it posses an practical issue even at a national level.

This maybe the very reason why Satoshi have left those coinbase utxo's untouched.

It's plain and simple, people will not trust Bitcoin anymore knowing that it wasn't decentralized as banksters and the government will just manipulate it. But that is somehow impossible to happen. Why? Since Satoshi created Bitcoin completely decentralized and he remained anonymous to make sure that there will be no entity to be subject and responsible other than the people who use Bitcoin. These people are now those who are in total control of the outcome in the future as they decide how to use Bitcoin either to hold it or not, use it in good ways, and exercise their freedom with it. In addition, exchanges are built with fairness in such a way that exchanges only provide Bitcoin based on their protocol. This means that if governments want to acquire most of the Bitcoin, they need to buy it completely and that's impossible.

I think one of the best ways to prevent this from happening is to build a mechanism within the Bitcoin Network to control the supply/price.  This could mean increasing the total supply from current 21 million to may be 30million. The additional 9million could then be distributed and locked safely using multi-sig/smart-contract and governed by a decentralized community. The  community could help prevent the extreme price volatility by keeping the price fluctuate moderately while remaining deflationary long-term.


* You could alternatively (or in combination with the above) reward people to lock and hold/stake their Bitcoins for certain period of time(esp when Bitcoin is bearish) and the bitcoins maybe unlock when Bitcoin becomes bullish. Once their bitcoins are locked, they could be rewarded in tokens or something... Reward automatically increases when Bitcoin price is going down to encourage more people to hold and decreases when Bitcoin is going up to encourage some selling