By ADM 
- According to Bitwise Chief Investment Officer, Matt Hougan, the crypto market is too focussed on the inclusion of non-Bitcoin assets in Trump’s strategic crypto reserve causing it to miss what he says is unambiguously bullish news for crypto.
- Hougan agrees the ideal reserve would be Bitcoin-only, but adds that the US treating Bitcoin and other cryptocurrencies as strategic assets is a “game-changer”.
- He argued the US crypto reserve will pressure other countries to stockpile crypto assets that are unlikely to be sold — increasing scarcity and driving prices higher.
Matt Hougan, the Chief Investment Officer (CIO) with asset management firm Bitwise, says the crypto market is too hung up on the details of President Trump’s proposed strategic crypto reserve and is failing to understand how bullish the news is.
Prices initially soared and then tumbled following the news, which Hougan described as a ‘misreading’: “…market participants have soured on the announcement because the proposed reserve holds more than bitcoin,” he said.
In his post on the Bitwise blog published earlier today, Hougan said the consternation over the inclusion of non-Bitcoin assets was understandable, but meant people were missing the forest for the trees. Because despite the flaws in the initial concept, Hougan said the US government treating Bitcoin as a strategic asset is a “game-changer” for crypto markets:
This week’s announcement—as imperfect as it is—marks the first time the U.S. has ever said that bitcoin is a strategic asset. As long as that stays intact, it feels like a game-changer to me
Matt Hougan, Bitwise Chief Investment Officer Hougan also suggested that this initial proposal, which includes ETH, SOL, ADA and XRP in addition to BTC, is unlikely to be the final proposal and we could well see significant changes following this Friday’s White House crypto summit — perhaps even a shift to a Bitcoin-only reserve.
Related: Trump’s Crypto Reserve Plan Faces Uncertain Future with Potential Congress Vote
Market Missing Three Important Points, Says Hougan
The Bitwise CIO said that while he’d also prefer to see a Bitcoin-only reserve, he believes the market is missing three key points about the strategic crypto reserve, causing its unusually bearish reaction to what he believes is good news.
Hougan’s first point is that the final strategic reserve is unlikely to be exactly like Trump’s initial proposal. He said it’s likely the plan will change and perhaps even be scrapped entirely if there’s enough pushback from crypto leaders at this week’s summit:
It’s possible that the pushback from this announcement will be large enough that the entire concept of the reserve gets scrapped, or perhaps limited only to assets that the U.S. government already holds from previous seizures. But I doubt it.
Matt Hougan, Bitwise Chief Investment Officer The most likely outcome though, says Hougan, is that the reserve goes ahead with a heavy focus on Bitcoin:
After the dust settles, I suspect the final reserve will be nearly entirely bitcoin, and it will be larger than people think.
Matt Hougan, Bitwise Chief Investment Officer The second thing Hougan believes the market has missed is that the US establishing a crypto reserve will likely pressure other countries into following suit.
If you are Honduras, Mexico, or Guatemala, and you’re watching El Salvador and now the U.S. acquire bitcoin, can you really afford to be at zero? If you’re Dubai, Qatar, or Saudi Arabia, are you comfortable with Abu Dhabi and the U.S. taking the lead? What about Russia? China?
Matt Hougan, Bitwise Chief Investment Officer Hougan’s third point is that once these crypto assets have been stockpiled they’re unlikely to be sold, suggesting it’ll be too politically costly for any future president — Democrat or Republican — to get rid of them.
“We learned this in the last election, where the GOP’s courtship of crypto gained it many votes while Democratic hostility gained few. I suspect that any crypto that is purchased will be held for a very long time, like the U.S.’s gold. Democratic leaders won’t want to alienate voters at little benefit to themselves,” he said.
Related: President Trump to Host Landmark White House Crypto Summit on March 7
Hougan believes the final iteration of the strategic crypto reserve “will look pretty good”, reminding readers that sometimes news that looks bullish is actually bullish if you don’t overthink it:
Ultimately, the market’s initial take strikes me as the right one: The U.S. government declaring crypto assets “strategic” is bullish. I think the market will eventually realize that.
Matt Hougan, Bitwise Chief Investment Officer The post US Crypto Reserve ‘Bullish’, Market ‘Overthinking Things’, Says Bitwise Senior Exec appeared first on Crypto News Australia.