TechFlow news, March 5 — According to The Block, Bitwise Chief Investment Officer Matt Hougan said the market's reaction to Trump's cryptocurrency reserve proposal was an "overinterpretation." While acknowledging flaws in the plan, he stressed that it remains overall positive. After Trump announced on Sunday that he had directed a working group to advance a U.S. crypto strategic reserve including BTC, ETH, XRP, SOL, and ADA, these assets rose 10%, 15%, 25%, 30%, and 70% respectively from their previous weekly lows. However, Bitcoin later dropped over 10%, and Ethereum plunged more than 15%.
In a report issued Tuesday to clients, Hougan noted that market skepticism largely stemmed from the inclusion of non-Bitcoin cryptocurrencies in the proposed reserve. "Including speculative assets like Cardano feels more politically motivated than strategically sound," he said. He emphasized that the market has overlooked three key factors: first, Trump’s negotiation style suggests the initial proposal will likely be revised before finalization; second, the U.S. move could trigger a global race for Bitcoin accumulation; and third, once acquired, these crypto assets are likely to be held long-term with no intention of selling.
Bitwise CEO Hunter Horsley, Coinbase CEO Brian Armstrong, and Gemini founders, the Winklevoss brothers, share this view, believing a Bitcoin-only reserve would be the optimal approach. Hougan expects the Trump administration will ultimately move forward with some version of the reserve plan. "The mere fact that the U.S. government declares crypto assets as having 'strategic' significance is inherently bullish. I believe the market will eventually recognize this."
