The US President Donald Trump has formally established a strategic Bitcoin reserve last week\u2014an action that has ignited both celebration and concern across the industry. At the heart of this debate is one central question: Will Bitcoin become a geopolitically important global macro asset like gold, or will it remain a niche holding among libertarians, cypherpunks, and speculators?<\/p>\n
That is the core takeaway from Bitwise\u2019s latest investor memo<\/a>, authored by Chief Investment Officer Matt Hougan. Titled \u201cThe Only Question That Matters in Bitcoin\u201d and dated March 10, 2025, the memo underscores how the long-term prospects of Bitcoin may hinge on whether governments worldwide\u2014starting with the United States\u2014view it as indispensable enough to keep building strategic reserves.<\/p>\n In the memo, Hougan highlights the striking nature of the US government\u2019s decision, writing: \u201cFifteen years after Bitcoin was created\u2014a decade and a half of ridicule and skepticism, of people calling it a \u2018pet rock\u2019 and \u2018rat poison squared\u2019\u2014the US government declared Bitcoin a \u2018strategic\u2019 asset that \u2018shall not be sold.\u2019\u201d<\/p>\n He argues that Bitcoin\u2019s endorsement as a strategic reserve asset<\/a> signals a historic shift: \u201cIt is a historic milestone, which in time will help propel Bitcoin to new all-time highs. Congratulations to all who believed in this possibility before it was cool.\u201d<\/p>\n Yet, markets have not uniformly welcomed this announcement. While the government\u2019s formal recognition would seem to bolster Bitcoin\u2019s legitimacy, it also disappointed some investors who had expected an immediate influx of new government purchases.<\/p>\n Shortly after the reserve news emerged, Bitcoin\u2019s price plummeted 13% from its recent high of over $92,000, dropping below $80,000 for the first time since November 2024. Hougan points to several contributing factors: broader economic worries, an equity market pullback, and, crucially, what he calls a \u201cmisunderstanding\u201d of the government\u2019s actual stance.<\/p>\n \u201cDespite the historic nature of the declaration, Bitcoin is down sharply in recent days,\u201d he notes in the memo. Investors had apparently hoped for immediate large-scale purchases from the US Treasury. Instead, they learned that the reserve would initially comprise the government\u2019s existing Bitcoin holdings\u2014an estimated 200,000 BTC, worth approximately $16 billion at current prices.<\/p>\n Hougan believes the market\u2019s negative reaction is unwarranted, emphasizing that merely retaining those 200,000 Bitcoin instead of selling them\u2014once anticipated under the prior administration\u2014removes a substantial overhang from the market.<\/p>\n Moreover, the new executive order explicitly states: \u201c[T]he Secretary of the Treasury and the Secretary of Commerce shall develop strategies for acquiring additional Government BTC provided that such strategies are budget neutral and do not impose incremental costs on United States taxpayers.\u201d<\/p>\n In his memo, Hougan underscores the significance of the word \u201cshall,\u201d suggesting it indicates a mandate rather than a mere possibility. Above all, Bitwise\u2019s memo insists on a long-term perspective, urging investors to concentrate on what Hougan terms \u201cthe only question that matters in Bitcoin.\u201d That question is whether Bitcoin becomes globally important, akin to gold, or whether it remains peripheral.<\/p>\n \u201cIf Bitcoin does matter globally, here\u2019s my view: It will be a $10-50 trillion asset, implying a 5x-25x return from current prices. If it doesn\u2019t, it\u2019ll be a footnote in history, bouncing around below $150,000, supported only by a small cohort of libertarians, cypherpunks, and speculators. There is no in between. Bitcoin either matters globally or it doesn\u2019t,\u201d Hougan writes.<\/p>\n From this vantage point, the US government\u2019s choice to retain (and potentially expand) its Bitcoin holdings represents an enormous signal to other countries. If, as Hougan suggests, nations including Czechia, Russia, China, El Salvador<\/a>, and India are weighing their own strategic moves in the digital asset space, the US adopting Bitcoin as strategic could spur them to follow suit\u2014especially if they want to front-run any further American acquisitions.<\/p>\nThe One Big Question For Bitcoin<\/h2>\n