Trump’s crypto reserve likely to be mostly Bitcoin, bigger than expected: Bitwise
US President Donald Trump’s proposed strategic crypto reserve is drawing attention for its potential composition, with expert opinions suggesting that Bitcoin will dominate the selection. Matt Hougan, chief investment officer of Bitwise, emphasized that despite initial plans to include multiple altcoins, the reserve is likely to consist predominantly of Bitcoin, as its inclusion is perceived as the most stable and strategic choice for a national reserve.
In a note issued on March 5, Hougan remarked that the announcement’s complexity arose from including various smaller cryptocurrencies, which could have confused market participants. Trump’s initial declaration on March 2 mentioned a range of digital assets, including Solana (SOL), XRP, and Cardano (ADA), along with Bitcoin (BTC) and Ether (ETH). However, Hougan predicted that, once the details are finalized, Bitcoin will represent nearly the entirety of the reserve.
Bitcoin’s price experienced a surge following the news of its inclusion in the proposed reserve; however, subsequent market fluctuations saw it dip below $83,000, later recovering to a level above $90,000. This volatility coincided with Trump’s decision to delay auto parts tariffs on Canada and Mexico, further impacting market sentiment.
Concerns have arisen within the crypto community regarding Trump’s shift away from a Bitcoin-only approach. Influential figures, including Coinbase CEO Brian Armstrong, have voiced their belief that Bitcoin is the only cryptocurrency suited for the reserve due to its unique properties as a store of value. Hougan echoed this sentiment, pointing out that the inclusion of speculative assets like Cardano may reflect a more calculated political strategy rather than a sound financial decision.
Despite the controversial rollout of the reserve proposal, Hougan remains optimistic about its long-term implications for Bitcoin. He indicated that initial suggestions from Trump rarely materialize unchanged, and feedback from industry leaders at the upcoming White House crypto summit could influence the final asset mix of the reserve. Commerce Secretary Howard Lutnick has hinted at a potential special status for Bitcoin within the reserve, suggesting that while other cryptocurrencies could be included, they would be treated differently.
The potential establishment of a US crypto reserve could set a precedent, encouraging other nations to consider similar strategies for accumulating Bitcoin. Hougan believes that even in the scenario of a political transition, any crypto acquired by the US government would likely be held long-term, akin to the country’s gold reserves. He noted the political implications of such a move, suggesting that Democratic leaders may be cautious not to alienate a growing voter base that supports cryptocurrency.
As the market continues to react to these developments, Hougan is confident that the initial bullish sentiment surrounding Bitcoin’s anticipated role in the reserve reflects a broader recognition of its significance in the evolving financial landscape.
