Bitwise: Bitcoin’s future is determined by this one question

The US President Donald Trump has formally established a strategic Bitcoin reserve last week—an action that has ignited both celebration and concern across the industry. This debate revolves around one question at its core: will Bitcoin be a global asset of geopolitical importance like gold or remain as a niche investment among libertarians and cryptopunks?

This is what Bitwise’s new report focuses on. investor memoTitled, it was written by Matt Hougan, Chief Investment Officer. Titled “The Only Question That Matters in Bitcoin” and dated March 10, 2025, the memo underscores how the long-term prospects of Bitcoin may hinge on whether governments worldwide—starting with the United States—view it as indispensable enough to keep building strategic reserves.

Bitcoin’s One Big Question

Hougan’s memo highlights the remarkable nature of US Government’s decision. “Fifteen years after Bitcoin was created—a decade and a half of ridicule and skepticism, of people calling it a ‘pet rock’ and ‘rat poison squared’—the US government declared Bitcoin a ‘strategic’ asset that ‘shall not be sold.'”

The Bitcoin endorsement is not a good thing. strategic reserve asset Signals a historical shift “It 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.”

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But the markets did not all welcome this news. The government’s official recognition may seem to strengthen Bitcoin’s credibility, but it has also disappointed investors who expected an immediate inflow of government purchases.

Bitcoins’ price dropped 13% after reserve news was announced, falling below $80,000. This is the lowest it has been since November 20,24. Hougan attributes the drop in price to a number of factors, including broader economic fears, equity market declines, and most importantly, what Hougan calls an “economy-wide pullback”. “misunderstanding” The actual position of the government.

“Despite the historic nature of the declaration, Bitcoin is down sharply in recent days,” He notes it in the memo. The investors had hoped that the US Treasury would make large purchases immediately. Instead, they learned that the reserve would initially comprise the government’s existing Bitcoin holdings—an estimated 200,000 BTC, worth approximately $16 billion at current prices.

Hougan believes the market’s negative reaction is unwarranted, emphasizing that merely retaining those 200,000 Bitcoin instead of selling them—once anticipated under the prior administration—removes a substantial overhang from the market.

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The new executive order also states explicitly: “[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.”

Hougan emphasizes the importance of the word in his memo “shall,” It is more likely to be a directive than just a possibility. The Bitwise memo emphasizes a long-term view, and urges investors to focus on what Hougan calls “the only question that matters in Bitcoin.” This question concerns whether Bitcoin is going to become a global currency, like gold, or remain a peripheral commodity.

“If Bitcoin does matter globally, here’s my view: It will be a $10-50 trillion asset, implying a 5x-25x return from current prices. If it doesn’t, it’ll 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’t,” Hougan is a writer.

This is an important message to send to the other countries. Hougan says that countries such as Czechia Russia and China could adopt Bitcoin. El Salvador, 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—especially if they want to front-run any further American acquisitions.

Some investors might be disappointed by the lack of immediate returns. massive government buysBitwise memo is optimistic despite recent Bitcoin volatility. Hougan sees the recent price drop as an opportunity to those who are looking at a long-term timeline. “I see one big takeaway. This short-term weakness is a gift,” He ends.

BTC is currently trading for $80,319.

Featured image was created with DALL.E chart by TradingView.com