Market Is Overthinking The U.S. Crypto Reserve Plan: Bitwise

The crypto market’s sharp reversal following President Trump’s U.S. Strategic Crypto Reserve announcement has sparked debate about the true impact of the initiative.

According to Bitwise Chief Investment Officer Matt Hougan, investors are overthinking the situation and missing the bigger picture.

In a detailed memo to clients, Hougan argues that despite the controversial inclusion of multiple assets beyond Bitcoin, the core concept of a government-backed crypto reserve remains a watershed moment that should ultimately drive prices higher once the initial concerns settle.

The announcement, which included Bitcoin, Ethereum, Solana, XRP, and Cardano as reserve assets, initially sent markets soaring before a complete reversal wiped out all gains within 36 hours.

Initial Proposal Unlikely to Show Final Implementation

The first insight Hougan shared is that the announcement should be viewed as an opening position rather than the final policy. The Bitwise CIO notes in his analysis,

“One thing we’ve learned by now is that Trump’s initial proposal is rarely his final. That’s been true of tariffs, and it’s probably true here.”

This pattern of announcing ambitious proposals before refining them through feedback has been a consistent approach from the Trump administration.

The current debate on which assets belong in a strategic reserve may serve a useful purpose. It may expand the range of policy options.

International Implications May Trigger Global Crypto Acquisition Race

Hougan’s second key insight focuses on the international implications of the reserve announcement.

He argued that the most important audience for this policy isn’t domestic but global.

The designation of crypto as a strategic asset by the world’s largest economy creates powerful incentives for other nations to secure their own positions. Hougan explained,

“The reason some bitcoiners have been excited about the idea of a U.S. strategic bitcoin reserve is they predict it would spark a global race. Countries would position themselves for the emergence of bitcoin as a globally important monetary asset.”

This international perspective is particularly relevant given the existing trend of national Bitcoin acquisition.

El Salvador, Bhutan, and Abu Dhabi have already established public Bitcoin holdings.

At the same time, rumors suggest additional countries are quietly building positions.

The U.S. announcement potentially accelerates this trend by adding legitimacy and urgency to national cryptocurrency strategies.

The memo argues that this international dimension may ultimately prove more consequential than the domestic debate over which specific assets belong in the reserve.

Political Reality Suggests Assets to Be Held Long-Term

The third point Hougan addresses is the concern about policy continuity across administrations.

Some market participants worry that cryptocurrencies purchased under the Trump administration might be sold if political control changes in the future election.

It could create a cycle of accumulation and liquidation that would add volatility rather than stability to the market.

This political reality creates strong incentives for future administrations to maintain crypto holdings once established.

Similar to the nation’s gold reserves, which have remained largely untouched despite changing political leadership.

Hougan predicts that “any crypto that is purchased will be held for a very long time, like the U.S.’s gold.”

While acknowledging frustration that “crypto can’t get a clean win these days,” the Bitwise CIO ultimately maintains that the market’s initial positive reaction—before subsequent overthinking set in—was the correct one.