Author: Matt Hougan, Chief Investment Officer of Bitwise; Deng Tong, Golden Finance

What is the real important thing about strategic Bitcoin reserves.

The United States established strategic Bitcoin reserves last week.

Please take some time to think about these words.

Fifteen years after Bitcoin was born - people call it "pet stone" and "rat poison" - the United States declares Bitcoin a "strategic" asset that cannot be sold.

This is a historic milestone that will push Bitcoin to record all-time highs over time. Congratulations to everyone who believed in this possibility before it became popular.

But now we have to talk about how the market sees this news.

Despite the historical significance of the statement, Bitcoin has fallen sharply in recent days. At the time of writing this memorandum, Bitcoin had fallen 13% from its high above $92,000 Thursday to below $80,000, the lowest since November 2024.

There are many reasons for this move, including a growing economic concerns and a general pullback in the stock market that is not related to reserve announcements. But don't get me wrong: part of the reason for the callback is the announcement itself.

As this article in Barron's magazine explains, cryptocurrency investors are upset because there is no announcement of plans to buy more bitcoins right away. Instead, it means that the reserves will be capitalized by confiscated assets already owned by the federal government.

The market disappointment is ridiculous for many reasons.

First, simply “not selling” existing assets is a major victory. The United States currently holds about 200,000 bitcoins, worth about $16 billion. Under the leadership of the former, most or all of Bitcoin is planned to be sold in 2025. Eliminating this excess supply in the market is of great significance.

Secondly, I think the market is greatly underestimating the possibility of actually starting to buy more Bitcoin in the short term. I encourage you to read the Executive Order in full. Among other things, it clearly stipulates the following:

"The Secretary of the Treasury and the Secretary of Commerce should develop strategies for obtaining more Bitcoin, provided that these strategies have no impact on the budget and do not bring incremental costs to U.S. taxpayers." (Primary Supplement.)

Note that it does not say that ministers “can” or “can”; Part of my career has been writing speeches for federal officials, and I can tell you that the words in the official statement are carefully selected.

"should" mean something here, and I think the market ignores that.

But the biggest reason why the market skepticism is absurd is that investors are just focusing on the wrong questions.

If you are a long-term investor, then BitcoinThe only important question in this is: Will Bitcoin become a global macro asset with geopolitical importance like gold?

Will there be more Bitcoin added to its strategic reserves...or less? Will there be more sovereign wealth funds investing in Bitcoin…or less? Will it play a bigger role in global financial markets…or is it a smaller role?

If Bitcoin is indeed important globally, my opinion is: It will be an asset worth $10-50 trillion, meaning 5 to 25 times the return than the current price. If not, it would be a footnote in history, hovering below $150,000, with only a small number of liberals, crypto-punks and speculators supporting it.

There is no middle ground. Bitcoin is either important or not important on a global scale.

Remember this problem to calm short-term noise. Would it be great if you step in and buy 100,000 bitcoins? Of course – this could immediately raise the price by 20% from the current level. I won't object to this.

But this is not as important as whether Bitcoin will become an important global macro asset. From this perspective, strategic reserves are a big step forward. This is the warning from the United States to the world, saying that "bitcoin is important." This is important to others – from the Czech Republic and El Salvador to Russia and India – they may be considering building their own strategic reserves. Do you think they would rather join before or after the United States starts taking major actions?

That's why, despite the volatility and anxiety among investors today, I've seen a big gain.

This short-term weakness is a gift.