Bitwise CIO Predicts US Crypto Reserve to be Bitcoin Dominated

Bitwise Chief Investment Officer Matt Hougan has predicted that the United States' planned cryptocurrency reserve will be larger and more focused on Bitcoin than initially expected. The reserve, which was initially announced to include multiple cryptocurrencies, has faced mixed market reactions. Hougan believes that the market's negative reaction to the inclusion of altcoins is misguided and that the final composition of the reserve will be predominantly Bitcoin.

President Donald Trump first announced the reserve on March 2, stating that it would include Solana, XRP, and Cardano, in addition to Bitcoin and Ethereum. This announcement initially caused Bitcoin prices to fluctuate, but Hougan believes that the final reserve will be nearly entirely Bitcoin and larger than people think. He suggests that the market should view the announcement as bullish for cryptocurrency markets.

Hougan notes that Trump's initial proposals are often subject to change, and input from industry leaders at an upcoming White House crypto summit could alter the composition of the reserve. Commerce Secretary Howard Lutnick has hinted that Bitcoin may receive special status, suggesting a tiered approach to the reserve's composition. The final structure may look quite different from what was initially announced.

Hougan also suggests that if the United States creates a crypto reserve, other countries may follow suit, further increasing demand for Bitcoin globally. He compares the holding of cryptocurrencies for the reserve to how the country holds its gold reserves, indicating that these assets will likely be held for a very long time. Political changes are unlikely to result in selling the reserve, as even if a Democrat replaces Trump after his presidency, Hougan believes the reserve will remain intact to avoid alienating voters.

Hougan's analysis highlights the broad support for crypto, noting that there are a number of people who love crypto and a relatively small number who hate it. The 2024 election showed that the GOP's support for crypto gained it many votes, while Democratic hostility gained few. Hougan believes that the market's initial positive reaction to the reserve announcement was the right one and expects that the market will eventually realize the bullish nature of the strategic reserve announcement. The US government declaring crypto assets as strategic represents a fundamental shift in their status.