Crypto Markets Are Misreading Trump’s Strategic Reserve: Bitwise
The cryptocurrency market has been whipped after President Donald Trump unexpectedly announced strategic crypto reserves over the weekend. Matt Hougan, chief investment officer of Bitwise Asset Management, believes traders have reacted to the details of the proposed plan and lacked potential bullish developments on digital assets.
Later Sunday, President Trump reveal A in strategic reserve, a U.S. government initiative aimed at acquiring and holding five different cryptocurrencies (Bitcoin, Ethereum, Solana, XRP and Cardano). Initially, the market response was emphasized as positive: Bitcoin’s price rose from about $85,000 to $95,000. However, as Hougan pointed out in his latest investor memo, the initial optimism was short-lived. By Monday, the major crypto assets mentioned in the announcement had surrendered.
Everyone is wrongly judging Trump’s crypto reserves
The drill bit released it memorandum March 4, titled “Market Error: Ideas on Trump’s Strategic Crypto Protected Areas.” Among them, Hougan pointed out that the market explanation is too narrow, which is the main reason behind the sudden pullback. “The market is thinking about things. Registration News is optimistic about all the flaws that are being launched.”
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He elaborated on why the proposal would not be welcomed by lasting enthusiasm. A large part of skepticism focuses on the White House’s choice of five cryptocurrencies, which critics see as an overly broad choice. In Hogan’s words, “The addition of speculative assets such as Cardano is more strategic than it is.”
While the plan initially seemed to be a Washington vote of confidence, some crypto commentators –For example, Coinbase CEO Brian Armstrong and Castle Island Ventures founder Nic Carter – questioning the reasons for expanding reserves outside of Bitcoin. Bitwise CEO Hunter Horsley also weighed shortly after the announcement, publicly stating his preference for more conservative, Bitcoin-centric reserves.
Still, Hougan’s memo argues that market participants may not be able to see a greater outlook. In the memorandum, Hougan outlined three key gains regarding the strategic reserve plan.
Hougan believes that President Trump’s first public draft is often very different from what it ends up becoming a policy. He believes that the reserve may eventually turn to a “bitcoin-only” approach, or develop into a more balanced composition after industry input. “In the next few days, big names in the cryptocurrency industry will give them a sense of what they think about reserves.”
According to Hogan, the announcement further consolidates Bitcoin’s perception as a strategically important asset. He believes that this may spur competing countries to follow suit, reflecting the smaller scale of adoption that has been seen El SalvadorBhutan and Abu Dhabi. “If you’re in Honduras, Mexico or Guatemala and you’re looking at El Salvador, and now that the U.S. has got bitcoin, can you really afford zero?”
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Hougan also pointed to political calculus, which suggests that even future governments with different views may not divest the existence of that reserve. He pointed out that the United States has held long-term strategic assets, such as gold, in history. “We learned this in the last election, where Republicans’ crypto proposals received many votes, and democratic hostilities received very few votes. I suspect any cryptocurrency purchased will be held for a long time.”
Despite optimism, Hogan acknowledged the prospect that the push could become so strong that reserves could scale or cancel. Critics say that including less favorable assets and Bitcoin has only stained the waters and could undermine the legitimacy of the plan. However, Hougan believes: “The ultimate reserve will be almost entirely Bitcoin, and it will be bigger than one thinks.”
He also highlighted a broader view: the simple recognition of the U.S. government that it is a game-changing meaning to treat crypto assets as “strategic.” He believes that such designations can catalyze global adoption and prompt other countries to buy cryptocurrencies that are already in place or increase their shares.
According to Hogan, Sunday’s announcement should be interpreted as a bullish on digital assets, although it is a complex rollout and the resulting price volatility. He warned that the market could allow short-term controversy to mask a greater understanding: “The U.S. government’s strategy to announce crypto assets is bullish. I think the market will eventually realize that.”
When the White House prepares to arrange cryptocurrencies This Friday Summit– Hosted by David Sacks, Crypto Tsar – Industry voices may be pressured to be more easily measured, possibly narrower reserve structures. Whether the ultimate policy will eventually narrow down the Bitcoin-focused program or persist with multiple coins, Hougan believes that this may still mark a meaningful step in the legalization of cryptocurrency mainstream. The initial reaction may be mixed, but as he said concisely: “After the dust settles, I suspect the final reserve will look good.”
At press time, BTC traded at $87,565.
Featured images from YouTube, charts from TradingView.com
