The BITCOIN Act of 2025: A New Era of US Monetary Policy

The United States government already holds approximately 198,000 Bitcoin worth over $23 billion—making it the world's largest state holder of BTC. Now, Congress wants to multiply that position fivefold. The BITCOIN Act of 2025 proposes acquiring 1 million BTC over five years, approximately 5% of Bitcoin's total supply, in what could become the most significant monetary policy shift since Nixon ended the gold standard.

This isn't speculative policy anymore. Executive orders have been signed, state-level reserves are operational, and legislation has bipartisan momentum in both chambers. The question is no longer whether the US will have a strategic Bitcoin reserve, but how large it will become and how quickly.

From Executive Order to Legislation

On March 6, 2025, President Trump signed an executive order establishing the Strategic Bitcoin Reserve, directing that all Bitcoin seized through criminal and civil forfeiture be retained rather than auctioned. This single decision removed approximately $20 billion of latent sell pressure from the market—pressure that had historically suppressed prices whenever the US Marshals Service liquidated seized assets.

But the executive order was just the opening move. Senator Cynthia Lummis (R-WY), chair of the Senate Banking Subcommittee on Digital Assets, reintroduced the BITCOIN Act in March 2025 with five Republican cosponsors: Jim Justice (R-WV), Tommy Tuberville (R-AL), Roger Marshall (R-KS), Marsha Blackburn (R-TN), and Bernie Moreno (R-OH).

The full name—Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act—reveals the legislative framing: this isn't about speculation, but about national competitiveness in the digital asset era.

Representative Nick Begich (R-AK) introduced companion legislation in the House, creating a bicameral path forward. Representative Warren Davidson's Bitcoin for America Act adds another dimension: allowing Americans to pay federal taxes in Bitcoin, with all such payments flowing directly into the Strategic Bitcoin Reserve.

The 1 Million BTC Program

The BITCOIN Act's most ambitious provision mandates Treasury to acquire 1 million BTC over five years—approximately 200,000 BTC annually. At current prices around $100,000, that represents $20 billion per year in purchases, or $100 billion total.

The scale deliberately mirrors US gold reserves. The federal government holds approximately 8,133 tonnes of gold, representing about 5% of all gold ever mined. Acquiring 5% of Bitcoin's 21 million maximum supply would establish similar proportional positioning.

Key provisions include:

• 20-year minimum holding period: Any Bitcoin acquired cannot be sold for two decades, eliminating political pressure to liquidate during market downturns
• 10% maximum biennial sales: After the holding period expires, no more than 10% of reserves can be sold in any two-year period
• Decentralized vault network: Treasury must establish secure storage facilities with "the highest level of physical and cybersecurity"
• Self-custody rights protection: The legislation explicitly prohibits the reserve from infringing on individual Bitcoin holders' rights
• State participation program: States can voluntarily store their Bitcoin holdings in segregated accounts within the federal reserve

Budget-Neutral Acquisition Strategy

How do you buy $100 billion in Bitcoin without raising taxes? The legislation proposes several mechanisms:

Gold Certificate Revaluation: Federal Reserve banks hold gold certificates issued in 1973 at a statutory value of $42.22 per troy ounce. The underlying gold now trades around $2,700 per ounce. By reissuing these certificates at fair market value, Treasury could access over $500 billion in paper gains—more than enough to fund the entire Bitcoin acquisition program.

Bo Hines, executive director of the President's Council of Advisers on Digital Assets, publicly floated selling portions of gold reserves as a budget-neutral funding mechanism. While politically sensitive, the arithmetic works: even a 10% reduction in gold holdings could fund several years of Bitcoin purchases.

Federal Reserve Remittances: The Fed historically remitted profits to Treasury, though this reversed during recent rate hikes. Future remittances could be earmarked for Bitcoin acquisition.

Continued Asset Forfeiture: The government continues seizing Bitcoin through criminal prosecutions. The recent $15 billion seizure connected to the Prince Group fraud case—127,271 BTC—demonstrates the scale of potential inflows.

Treasury Secretary Scott Bessent confirmed the approach in August 2025: "We're not going to be buying that [bitcoin] but are going to use confiscated assets and continue to build that up." This suggests the administration may initially rely on seizures while working toward legislative authorization for direct purchases.

State-Level Bitcoin Reserves

Federal action has catalyzed state-level adoption:

New Hampshire became the first state with operational legislation when Governor Kelly Ayotte signed HB 302 on May 6, 2025. The law allows the state treasurer to invest up to 5% of public funds in digital assets with market caps exceeding $500 billion—a threshold only Bitcoin currently meets. Notably, New Hampshire permits investment through ETFs, simplifying custody requirements.

Texas moved most aggressively. Governor Greg Abbott signed SB 21 and HB 4488 in June 2025, establishing the Texas Strategic Bitcoin Reserve with robust legal protections preventing future legislatures from easily dismantling it. Texas is the only state that has actually funded its reserve, committing $10 million initially with plans to double that amount. The legislation requires cold storage custody and allows Bitcoin to enter the reserve through purchases, forks, airdrops, or donations.

Arizona followed a narrower path. HB 2749 allows the state to hold unclaimed crypto assets in their original form rather than liquidating them. However, Governor Katie Hobbs vetoed more ambitious proposals (SB 1025 and HB 2324) that would have allowed direct investment of up to 10% of state funds in digital assets.

At least 28 states have introduced Bitcoin reserve proposals, though many remain stalled or rejected. The federal BITCOIN Act includes provisions allowing state reserves to be stored within the federal system, potentially accelerating adoption.

Market Implications

The supply-demand dynamics are stark. Redirecting 198,000 BTC from regular USMS auctions into a no-sale strategic reserve removes nearly $20 billion of latent sell pressure. Add the 1 million BTC acquisition program, and the US government becomes a perpetual buyer absorbing roughly 1% of circulating supply annually.

Institutional analysts project significant price impacts:

• JPMorgan: $170,000 target
• Standard Chartered: $150,000 target
• Tom Lee (Fundstrat): $150,000-$200,000 by early 2026, potentially $250,000 by year-end
• Galaxy Digital: $185,000 by end of 2026

The projections cluster around $120,000-$175,000 for 2026, with broader ranges spanning $75,000 to $225,000 depending on policy execution and macroeconomic conditions.

Institutional adoption metrics support the bullish case. Seventy-six percent of global investors plan to expand digital asset exposure in 2026, with 60% expecting to allocate more than 5% of assets under management to crypto. Over 172 publicly traded companies held Bitcoin as of Q3 2025, up 40% quarter-over-quarter.

US Bitcoin ETF assets reached $103 billion in 2025, with Bloomberg Intelligence projecting $15-40 billion in additional inflows for 2026. Galaxy Digital expects inflows exceeding $50 billion as wealth management platforms remove restrictions.

Global Competition Dynamics

The US Strategic Bitcoin Reserve doesn't exist in isolation. El Salvador established the first sovereign Bitcoin reserve in 2021 and has accumulated over 6,000 BTC. Brazil followed with its own reserve framework.

Some analysts speculate that large-scale US buying could trigger a "global Bitcoin arms race"—a self-reinforcing cycle where nations compete to accumulate BTC before rivals drive prices higher. Game theory suggests early movers capture disproportionate value; late adopters pay premium prices for inferior positions.

This dynamic partially explains the aggressive state-level competition within the US itself. Texas funded its reserve quickly precisely because waiting means paying more. The same logic applies internationally.

Implementation Timeline

Based on current legislative momentum and executive actions:

Already Completed:

• Executive order establishing Strategic Bitcoin Reserve (March 2025)
• 198,000 BTC transferred to permanent reserve status
• Three states with operational Bitcoin reserve legislation

2026 Projections:

• BITCOIN Act advancement through congressional committees
• Treasury blueprint for budget-neutral acquisition finalized
• Additional state reserve legislation in 5-10 states
• Potential first direct federal Bitcoin purchases under pilot programs

2027-2030 Window:

• Full 1 million BTC acquisition program operational (if legislatively authorized)
• 20-year holding period begins for early acquisitions
• State reserve network potentially covering 15-20 states

Risks and Uncertainties

Several factors could derail or delay implementation:

Political Risk: A change in administration or congressional control could reverse policy direction. The executive order's protections are weaker than legislative codification—hence the urgency around passing the BITCOIN Act.

Custody and Security: Managing billions in Bitcoin requires institutional-grade custody infrastructure that the federal government currently lacks. Building decentralized vault networks takes time and expertise.

Budget Scoring: Congressional Budget Office scoring of the gold certificate revaluation mechanism could complicate passage. Novel funding mechanisms invite procedural challenges.

Market Volatility: A significant Bitcoin price decline could undermine political support, even if long-term fundamentals remain intact.

International Relations: Major Bitcoin accumulation by the US could strain relationships with nations whose monetary policies assume Bitcoin insignificance.

What This Means for Builders

For blockchain developers and Web3 companies, the Strategic Bitcoin Reserve represents validation from the world's largest economy. Regulatory clarity typically follows institutional adoption—and there's no larger institution than the US government.

The infrastructure implications extend beyond Bitcoin itself. Custody solutions, compliance frameworks, audit mechanisms, and cross-chain interoperability all become more valuable as sovereign entities enter the ecosystem. The same infrastructure serving a state Bitcoin reserve can serve enterprise clients, pension funds, and sovereign wealth funds globally.

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Building infrastructure that serves institutional needs? BlockEden.xyz provides enterprise-grade blockchain API and RPC services across 20+ networks—the same reliability that institutions require as Bitcoin moves from speculation to strategic asset.