Strategic Bitcoin Reserve Eliminates Last Threat, Says Bitwise's Matt Hougan

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, declared that the final existential threat to Bitcoin BTC/USD vanished with President Trump's recent executive order establishing a U.S. Strategic Bitcoin Reserve.

What Happened: In a note released on Tuesday, Hougan argued that this move eliminates the lingering fear of a government ban, marking the present as the safest time ever to invest in Bitcoin on a risk-adjusted basis.

Hougan traced Bitcoin's journey from its early days, recalling a 2011 meeting at ETF.com where it first hit $1—a moment he skipped investing in due to steep risks like shaky exchanges and regulatory uncertainty.

"Back then, putting $1,000 into Bitcoin was a massive gamble," he wrote, citing issues like New Liberty Financial's sketchy setup and the lack of secure custody.

Over time, he noted, Bitcoin overcame technical doubts, trading woes with Coinbase's COIN rise, and custody fears as firms like Fidelity stepped in, steadily chipping away at its vulnerabilities.

The turning point, Hougan emphasized, came with Trump's order this month, which positions Bitcoin as a federal reserve asset using seized coins.

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"The last existential risk I always mentioned at conferences was a U.S. ban—now it's gone," he stated, addressing past concerns about Bitcoin challenging the dollar.

He argued the U.S. sees Bitcoin as a stronger fallback than rivals like China's yuan if the dollar's dominance wanes, a shift he didn't foresee earlier.

This policy, he said, flips the script from potential suppression to strategic embrace.

Hougan pointed to shifting investor behavior as proof, noting Bitwise clients now often allocate 3% of portfolios to Bitcoin, up from 1% two years ago when a ban loomed as a possibility.

What’s Next: He predicts this could climb to 5% or more as the market grasps Bitcoin's reduced risk profile, bolstered by spot Bitcoin ETFs launched in January 2024 and now this reserve.

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