Bitwise Official Says "The Market Is Absolutely Wrong" About Bitcoin Decline, Shares His Own Bull Scenario

Bitcoin has fallen sharply by as much as 6.5% today as the volatility in the market continues following President Donald Trump's executive order to create a strategic Bitcoin reserve for the United States.

Earlier in the day, the world's largest cryptocurrency was down as much as 4.5% to trade at around $78,650. The decline follows investor reactions to the U.S. government's reserve announcement, which stated that it would fund the reserve using BTC seized in criminal and civil seizure cases. Remarkably, the government has no plans to purchase additional BTC directly.

Following the announcement last Thursday, crypto markets reacted negatively, with some investors disappointed with the lack of a more aggressive accumulation strategy. However, some analysts remain optimistic about the long-term effects of the reserve.

"I think the market was absolutely wrong about that," Matt Hougan, chief investment officer at Bitwise Asset Management, said in an interview on CNBC's Squawk Box Asia, adding, "The market is short-lived in frustration that the government didn't immediately buy a significant amount of 100,000 or 200,000 Bitcoin."

Hougan pointed to statements by White House Crypto and Artificial Intelligence Chief David Sacks, who stated in X that the U.S. government would explore "budget-independent strategies to acquire additional Bitcoin, provided there is no additional cost on American taxpayers."

"I think the right question to ask is: Does this executive order increase the likelihood that BTC will become a geopolitically important currency or asset in the future? Will other governments follow in the footsteps of the United States and try to build their own strategic reserves? In my opinion, the answer to that is definitely yes," he said.

Emphasizing that this development could be crucial in determining Bitcoin's long-term valuation, Hougan suggested that such moves could increase the BTC price from $80,000 to $1 million per coin.

Despite the short-term price decline, Hougan remains confident in Bitcoin's long-term prospects. Hougan concluded: "I think the market is going to stand on its own two feet soon and actually realize that this is an incredible long-term upside for this asset and crypto as a whole."