- Matt Hougan says the U.S. Bitcoin Reserve removes the last big risk for Bitcoin and secures its future.
- Institutional investors now hold more Bitcoin as confidence grows and risks decrease.
- More U.S. states are introducing Bitcoin reserve bills to support adoption and long-term stability.
Bitwise Chief Investment Officer Matt Hougan believes President Donald Trump’s executive order to establish a U.S. Strategic Bitcoin Reserve has removed the last major risk facing Bitcoin. He stated that this decision solidifies Bitcoin’s status as a financial asset and eliminates the concern that the U.S. government might take action against it.
Hougan remembers first encountering Bitcoin in 2011, when it was worth $1. Although at that time there was no doubt about Bitcoin’s potential, its future seemed uncertain as its trading platforms were unreliable.
Trump recently signed an Executive Order that created a Strategic Bitcoin Reserve using about 200,000 BTC that had been confiscated as a outcome of various legal proceedings. The executive order also directs Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to explore ways to acquire more Bitcoin without adding to government spending.
The options include using Treasury surplus funds or revaluing gold certificates. Hougan pointed out that this move removes uncertainty surrounding Bitcoin’s future in the U.S., as fears of a potential ban have now been put to rest.
Bitcoin’s Risk Profile Has Shifted, Says Hougan
According to Hougan, buying and holding the asset was a big risk back in the early days of Bitcoin. However, Improvements in financial infrastructure have improved the access and security to Bitcoin for both individual and institutional investors over time. He highlighted some key milestones such as the approval of spot Bitcoin ETFs. These developments, he said, have provided Bitcoin with a level of legitimacy that did not exist in the past.
For years, investors worried that the U.S. government could take steps to limit Bitcoin’s growth, similar to how it restricted private gold ownership in 1933. Hougan stated that this concern kept many investors cautious about allocating significant funds to Bitcoin. However, with the establishment of a U.S. Bitcoin Reserve, that risk is no longer a factor. He argued that if the dollar’s global position ever faced serious challenges, Bitcoin could serve as a more stable alternative compared to other currencies, such as the Chinese yuan.
Institutional Investors Increasing Bitcoin Allocations
Hougan also pointed to a growing number of institutional investors allocating more of their portfolios to Bitcoin. Two years ago, most firms held around 1% of their assets in Bitcoin, but that number has now increased to 3%. He expects this figure to rise further as confidence in Bitcoin continues to strengthen. As traditional investors recognize that Bitcoin’s risks have significantly decreased, more of them are choosing to increase their holdings.
There is also momentum building among U.S. states that are lobbying to hold their own reserves of Bitcoin. Bitcoin Laws reported that there are 27 states that have already submitted Bitcoin related bills while 35 more are under consideration. Recently, Kentucky Governor Andy Beshear signed House Bill 701 into law.
Meanwhile, the Strategic Bitcoin Reserve Act, which passed the House with overwhelming support, is waiting for a decision by Oklahoma’s Senate. Similarly Missouri and Arizona are considering similar proposals.
