Bitwise CIO Matt Hougan believes the market is misreading the impact of former President Donald Trump’s proposed strategic crypto reserve, arguing that the initiative will ultimately be bullish for digital assets despite initial volatility.
Hougan projected that the final reserve will predominantly be made up of Bitcoin (BTC) and will most likely be much larger than the industry expects.
He also argued that other nations may accelerate their own Bitcoin acquisitions in response and that once acquired, the US will be unlikely to sell its holdings for a very long time — if ever.
Industry concerns
Trump’s announcement on March 2, outlining a reserve composed of digital assets beyond Bitcoin, initially sent BTC soaring from $85,000 to $95,000. However, by March 3, prices retraced as skepticism over the inclusion of altcoins grew amid rising geopolitical tensions.
According to Hougan, the sell-off was driven by concerns that the reserve’s structure was more political than strategic, causing negative sentiment to permeate the market.
Some industry leaders, including Coinbase CEO Brian Armstrong and Castle Island Ventures co-founder Nic Carter, criticized the inclusion of speculative assets like Cardano (ADA). Bitwise CEO Hunter Horsley also advocated for a Bitcoin-only reserve, aligning with broader market sentiment that such a move would provide greater stability.
However, Hougan argued that the market is overreacting. He said the initial proposal has shifted the conversation, making a Bitcoin-only reserve a more viable outcome.
According to Hougan:
“The boldness of the initial proposal has widened the Overton window.”
He also argued that the announcement was the first version of the proposal and is likely to evolve as the industry provides more feedback to the Trump administration.
Hougan further stated that regardless of whether the final version of the proposal changes, the core idea of a government-backed reserve remains a long-term positive for the industry.
Global ripple effects
Hougan also highlighted that the move could have broader geopolitical implications beyond the US, arguing that other countries may now feel pressured to establish their own Bitcoin reserves — accelerating global adoption.
Hougan noted:
“El Salvador, Bhutan, and Abu Dhabi have already made strategic Bitcoin acquisitions. If you are Honduras, Mexico, or Guatemala, and you see both El Salvador and the US making moves, can you afford to be left out? If you’re Dubai, Qatar, or Saudi Arabia, does Abu Dhabi’s lead put pressure on you to act?”
White House crypto advisor David Sacks is set to host a Crypto Summit on March 7, where industry leaders are expected to push for a revised reserve structure. Sacks also recently revealed that Trump will reveal more details about the reserve during the summit.
Long-term policy implications
Hougan also addressed concerns that future administrations could reverse the policy, arguing that political realities make such a move unlikely.
He noted that crypto enjoys strong support among certain voter demographics, making it a difficult issue for Democrats to oppose outright.
According to Hougan:
“The GOP’s embrace of crypto won votes in the last election, while Democratic hostility gained little. Any crypto purchased will likely be held for a long time, similar to the U.S. gold reserves.”
While the initial market reaction was mixed, Hougan argued that the creation of a US strategic crypto reserve signals a turning point.
Whether the final reserve holds multiple assets or becomes Bitcoin-only, the broader takeaway is that the US government now considers crypto a strategic asset — a stance that could have lasting consequences for global markets.
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