Bitwise CIO Matt Hougan has said that a U.S. Bitcoin strategic reserve could prevent a future ban of the asset and boost global holdings.

This development follows President Donald Trumps signing of an Executive Order to establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile.

The Potential Advantages of a BTC Reserve

White House AI and Crypto Czar David Sacks revealed the development in a Thursday post on X. Reacting to the news, Matt Hougan highlighted the impact that the establishment would have.

The Bitwise investment head stated that the approval would significantly lower the chances of the U.S. government ever banning Bitcoin. He also suggested that it would accelerate the pace at which countries consider setting up such reserves, as they might see a short-term opportunity to act before potential additional purchases by the country.

Further, he emphasized that the decision would make it much more difficult for institutions, including national account advisor platforms and quasi-governmental agencies like the IMF, to portray Bitcoin as risky or unsuitable for holding.

Michael Saylor, founder of Strategy (formerly MicroStrategy), has previously stated that such an initiative would establish the United States as a leader in cyberspace. He emphasized that it is not only about accumulating BTC but also about securing a dominant position in the digital economy.

Meanwhile, Hougan has consistently been bullish about the idea. In a previous memo, he suggested that it could drive a major shift in global monetary policy and institutional investment.

Amidst some negative sentiment over whether it would include a mix of digital assets, he has urged investors to recognize its potential to reshape the regulatory environment in favor of crypto.

Crypto Market Reacts

Trump’s executive order establishes a stockpile that would not use taxpayer money to acquire cryptocurrencies. Instead, it will be funded exclusively with Bitcoin confiscated in criminal and civil forfeiture cases.

The government will also not acquire additional assets for the reserve beyond those obtained through forfeiture proceedings. This means that it will not be buying Ethereum (ETH), XRP (XRP), Solana (SOL), or Cardano (ADA), as the president had mentioned earlier this week.

Meanwhile, reacting to the news, the total crypto market capitalization is now back below $3 trillion. BTC is down 4.7% at $88,000 after hitting a days low of $84,717. ETH dropped 5.8% to $2,169. Among altcoins, SOL fell 5%, XRP slipped 1.5%, and ADA dropped 10%.