In a bold move to integrate cryptocurrency into national reserves, former U.S. President Donald Trump has proposed a crypto reserve featuring multiple large-market cap altcoins. However, according to Bitwise Chief Investment Officer Matt Hougan, the final composition will be almost “entirely Bitcoin.”
Hougan noted that the initial announcement sparked uncertainty among market participants due to the inclusion of assets beyond Bitcoin. In a March 5 market note, he explained, “The inclusion of small-cap assets in the announcement unnecessarily complicated matters.”
Initially, Trump suggested the reserve would include Solana (SOL), XRP, and Cardano (ADA), before clarifying that Bitcoin (BTC) and Ethereum (ETH) would be its core assets. Despite this, Hougan remains confident that Bitcoin will dominate the reserve in the long run, stating, “After the dust settles, I suspect the final reserve will be nearly entirely Bitcoin, and it will be larger than people think.”
The announcement initially caused Bitcoin’s price to surge, though it later fell below $83,000 before rebounding above $90,000. Market fluctuations were also influenced by Trump’s delay on auto parts tariffs for Canada and Mexico.
Trump’s deviation from a Bitcoin-only reserve has drawn criticism from crypto purists. Coinbase CEO Brian Armstrong emphasized Bitcoin’s superiority, calling it “a successor to gold.” Similarly, Hougan questioned the inclusion of altcoins like Cardano, suggesting that their addition was more political than strategic.
Despite concerns, Hougan maintains that the development remains bullish for Bitcoin and the broader crypto market. He pointed out that Trump’s initial proposals often evolve before implementation, and input from industry leaders at the upcoming White House crypto summit may refine the reserve’s structure.
Commerce Secretary Howard Lutnick hinted at Bitcoin receiving special status, while other cryptocurrencies would be treated differently. Hougan also acknowledged a small possibility that opposition could lead to the reserve’s modification or cancellation, limiting holdings to seized assets.
If the U.S. proceeds with a crypto reserve, it could set a global precedent, prompting other nations to follow suit. Hougan also dismissed concerns over potential sell-offs, asserting that any acquired crypto is likely to be held long-term, similar to the country’s gold reserves.
The political implications of the reserve are significant. Hougan emphasized that the GOP’s embrace of crypto in the last election gained them substantial support, while Democratic resistance had little impact. “The market’s initial bullishness strikes me as the right one,” he concluded. “I think the market will eventually realize that.”
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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