Bitwise CIO: Trump Bitcoin reserve erases last major risk for BTC

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Mikhail Vnuchkov

26.03.2025

Bitwise CIO: Trump Bitcoin reserve erases last major risk for BTC — Bitwise CIO: Now is the best time to buy Bitcoin!

According to Bitwise Chief Investment Officer Matt Hougan, Donald Trump’s executive order to create a U.S. strategic Bitcoin reserve eliminates "the last existential risk," strengthens Bitcoin's position as a reliable financial asset, and removes lingering fears of government crackdowns.

Hougan believes the recent directive by President Trump to reserve a portion of seized Bitcoin for national strategic use has removed the final major threat to Bitcoin’s long-term viability.

In a memo to investors, Hougan recalls first discovering Bitcoin in 2011 when it was trading for just $1. He notes that a $1,000 investment at that time would be worth $88 million today.However, despite its potential, he describes those early days as extremely risky—marked by unreliable exchanges, storage issues, and regulatory uncertainty.

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Today, however, Hougan argues that Bitcoin offers the most attractive risk-adjusted returns in its history.

He credits several key developments with reducing Bitcoin’s early vulnerabilities: the launch of Coinbase, the emergence of institutional custodians like Fidelity, and the approval of spot Bitcoin ETFs, which have added both structure and legitimacy to the asset.

Still, one concern remained: could the U.S. government ever try to ban Bitcoin, as it once did with gold in 1933? That fear, Hougan says, has now been put to rest.

Following Trump’s order to create a Strategic Bitcoin Reserve—leveraging approximately 200,000 BTC previously seized through legal actions—confidence in Bitcoin has grown even further.

An estimated 103,500 BTC will be held for the long term, while some seized coins, such as the 94,636 BTC from the Bitfinex hack, are expected to be returned to crime victims.

Confidence in Bitcoin continues to grow

Trump also instructed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to explore budget-neutral strategies for acquiring additional Bitcoin. These may include using surplus Treasury funds or revaluing gold certificates.

In addition, 41 Bitcoin reserve bills have been introduced across 23 states, with 35 of them still under active consideration.

“This is how the last existential risk for Bitcoin disappears,” Hougan states, adding that if U.S. dollar dominance is ever seriously challenged, Bitcoin would serve as a stronger backup than alternatives like the Chinese yuan.

While most clients allocated about 1% of their portfolios to crypto two years ago, Hougan says that figure has now increased to 3%, and is expected to reach 5% or more as trust in Bitcoin continues to grow.

As we wrote, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared insights on the potential implications of this high-profile sale. In a recent post on social media platform X, Hougan expressed confidence that the market would “hoover up” the 69,000 Bitcoin if the Biden administration proceeds with the sale.

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