- Crypto market prices have dipped following US President Donald Trump’s proposed crypto strategic reserve because it holds more than Bitcoin
- Trump announced on Sunday, the reserve would hold Bitcoin, Ethereum, XRP, Solana, and Cardano
- Matt Hougan, Bitwise’s CIO, lists three factors the market isn’t considering following the news
Bitwise’s CIO has said that US President Donald Trump’s news about a crypto reserve is bullish for the market despite a dip in prices.
In a client memo, Matt Hougan said that while the announcement from Trump is good news, the market isn’t reflecting that, adding:
“Instead, market participants have soured on the announcement because the proposed reserve holds more than Bitcoin.”
On Sunday, Trump took to Truth Social to say he’d directed his crypto working group to include Bitcoin, Ethereum, XRP, Solana, and Cardano in the crypto strategic reserve.
Some leading figures in the crypto space responded to the news, including Brian Armstrong, Coinbase’s CEO, who said he was “excited to learn more,” adding that:
“Just Bitcoin would probably be the best option – simplest, and clear story as successor to gold.”
Excited to learn more. Still forming an opinion on asset allocation, but my current thinking is:
1. Just Bitcoin would probably be the best option – simplest, and clear story as successor to gold
2. If folks wanted more variety, you could do a market cap weighted index of crypto… https://t.co/jv8Gcn8N2S— Brian Armstrong (@brian_armstrong) March 3, 2025
Three things to consider
According to the Bitwise CIO, the market is missing three things regarding Trump’s crypto reserve news.
The first is that this initial proposal isn’t the final proposal.
Over the coming days, people from the crypto industry will make their feelings clear. This could see the idea of the “reserve [getting] scrapped, or perhaps limited only to assets that the US government already holds from previous seizures. But I doubt it,” Hougan said.
“After the dust settles, I suspect the final reserve will be nearly entirely Bitcoin, and it will be larger than people think,” he added.
The second point is that other countries are more likely to buy into crypto. Hougan states that some Bitcoiners predict the move taken by the US could produce a global race. Countries like El Salvador, Bhutan, and Abu Dhabi have already all bought Bitcoin.
Other countries on the sidelines may suddenly think now is a good time to invest rather than staying at zero and preventing any one country from taking the lead.
The third point, Hougan refers to, is that once the crypto is bought, it’s unlikely to be sold. Despite a Joe Biden administration who were less favorable toward crypto over the past four years, more people love crypto than those who hate it in the US, he said.
Rather than swaying crypto sales following different elections, he thinks that “any crypto that is purchased will be held for a very long time, like the US’s gold. Democratic leaders won’t want to alienate voters at little benefit to themselves.”
Hougan ends by saying that while the “inclusion of small-cap assets in the announcement unnecessarily complicated matters…The US government declaring crypto assets “strategic” is bullish.”
