Despite including several large-market cap altcoins,\u00a0US President Donald Trump\u2019s planned crypto reserve will eventually be made up almost \u201centirely of Bitcoin,\u201d says Bitwise chief investment officer Matt Hougan.<\/p>\n
\u201cMarket participants have soured on the announcement because the proposed reserve holds more than Bitcoin,\u201d Hougan explained<\/a> in a March 5 market note. \u201cThe inclusion of small-cap assets in the announcement unnecessarily complicated matters.\u201d<\/p>\n On March 2, Trump initially said<\/a> the stash would include Solana (SOL<\/a>), XRP (XRP<\/a>) and Cardano (ADA<\/a>), later adding that Bitcoin (BTC<\/a>) and Ether (ETH<\/a>) would be \u201cthe heart\u201d of the reserve. Hougan said:\u00a0<\/p>\n \u201cAfter the dust settles, I suspect the final reserve will be nearly entirely Bitcoin, and it will be larger than people think.\u201d<\/p><\/blockquote>\n Bitcoin\u2019s price initially jumped on the news of its inclusion in the slated reserve<\/a>, but it later sunk<\/a> to below $83,000 and has only recovered to above $90,000 over the last day in part due to Trump delaying auto parts tariffs on Canada and Mexico.<\/p>\n Trump\u2019s move away from a Bitcoin-only reserve has concerned<\/a> some crypto commentators who said Bitcoin is the only cryptocurrency suited for inclusion in the reserve, with Coinbase CEO Brian Armstrong arguing it\u2019s \u201ca successor to gold.\u201d<\/p>\n \u201cThe inclusion of speculative assets like Cardano feels more calculating than strategic,\u201d Hougan said. He added that \u201cdespite the flawed rollout,\u201d he thinks the market \u201cis misreading things,\u201d adding:\u00a0<\/p>\n \u201cIn the end, this is bullish.\u201d<\/p><\/blockquote>\n Hougan said that, as is the case with tariffs, Trump\u2019s initial proposals are \u201crarely his final,\u201d and input on the reserve from industry bigwigs at the upcoming White House crypto summit<\/a> could see its makeup change.<\/p>\n Commerce Secretary Howard Lutnick has hinted<\/a> that Bitcoin could receive a special status in the reserve and \u201cother crypto tokens, I think, will be treated differently \u2014 positively, but differently.\u201d<\/p>\n Hougan said there\u2019s a small, more unlikely, possibility that pushback on the idea will see the reserve scrapped or limited to assets the government has already seized<\/a>.<\/p>\n If the US makes a crypto reserve, it\u2019ll be more likely that other countries will look at wanting their own slice of Bitcoin, he added.<\/p>\n Source: <\/em>Bitwise<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n It\u2019s also unlikely that the US will sell any crypto it buys, even if a Democrat takes Trump\u2019s place after he\u2019s gone. Hougan said. Any crypto \u201cwill be held for a very long time,\u201d like the country\u2019s gold reserves, he added.<\/p>\n Related: <\/strong><\/em>Bitcoin volatility soars amid US crypto reserve, tariff jitters<\/strong><\/em><\/a>\u00a0<\/p>\n \u201cDemocratic leaders won\u2019t want to alienate voters at little benefit to themselves,\u201d he said.\u00a0<\/p>\n \u201cThere are a significant number of people who love crypto and a relatively small number who hate it,\u201d Hougan added. \u201cWe learned this in the last election, where the GOP\u2019s courtship of crypto gained it many votes while Democratic hostility gained few.\u201d<\/p>\n Hougan said the market\u2019s initial bullishness \u201cstrikes me as the right one […] I think the market will eventually realize that.\u201d<\/p>\n Magazine: <\/strong><\/em>Trump\u2019s crypto ventures raise conflict of interest, insider trading questions<\/strong><\/em><\/a>\u00a0<\/p>\n