Trumps Strategic Bitcoin Reserve Removes Final Risk for Bitcoin, Says Bitwise CIO
In a note to clients, Hougan recalled his first encounter with Bitcoin in 2011, when it was trading at just over $1. He noted that had he invested $1,000 then, it would now be worth $88 million. Despite early concerns around custody, technology, and regulation, Hougan believes that today represents the best time in history to purchase Bitcoin from a risk-adjusted perspective.
Bitcoin Overcomes Challenges to Gain Institutional Acceptance
Hougan explained that Bitcoin, once seen as a high-risk investment with uncertain prospects, has matured with increased institutional support. The launch of Coinbase in 2011, institutional custodianship from firms like Fidelity, and the approval of spot Bitcoin ETFs last year have all contributed to Bitcoins growing credibility. With the establishment of the Strategic Bitcoin Reserve, concerns about government bans have effectively been alleviated.
Strategic Bitcoin Reserve Reduces Risk of Government Bans
Trumps March 6 executive order created the U.S. Strategic Bitcoin Reserve, with 103,500 BTC (valued at $17.6 billion) currently held by the government, seized through criminal and civil proceedings. The reserve also opens the door for the U.S. government to acquire more Bitcoin without additional taxpayer costs, further derisking the asset.
Increased Bitcoin Allocations as Confidence Grows
Swyftx analyst Hougan observed a notable shift in investor behavior, with clients increasing their Bitcoin and crypto allocations from 1% to 3% over the past two years. As confidence in Bitcoin continues to rise, he believes that allocation percentages could increase to 5% or more, as more institutions and investors recognize the reduced risk and long-term potential of the cryptocurrency.
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Text source: Coindoo
