New Crypto Strategic Reserve Proposal Shakes Market
- 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:
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.
1. Initial Proposal vs. Final Proposal
The first point is that the initial proposal may not be the final one. Industry feedback could lead to changes, possibly limiting the reserve to assets already held by the US government.
After the dust settles, the final reserve is likely to be mostly Bitcoin and larger than anticipated.
2. Global Adoption
Hougan suggests that other countries may follow the US in buying into crypto, sparking a global race. Countries like El Salvador, Bhutan, and Abu Dhabi have already purchased Bitcoin, prompting others to consider investing to avoid falling behind.
3. Long-Term Holding
Despite political shifts, Hougan believes that once crypto is bought, it will be held long-term like the US’s gold reserves. This stability could prevent rapid selling based on changing administrations.
Hougan concludes that while the inclusion of additional assets in the proposal may complicate matters, the US government’s recognition of crypto as “strategic” is a positive sign for the market.
