Is the US government planning to buy Bitcoin directly? What does the shift from never actively purchasing to doing so mean?

ARK Invest founder Cathie Wood recently revealed on a podcast that the U.S. government may no longer rely solely on law enforcement seizures of Bitcoin in the future, but instead directly purchase on the open market to bolster the national strategic reserve. This prediction has attracted market attention because it implies that the government’s attitude toward Bitcoin is shifting from passive holding to active allocation.

Changes in Policy Signals

From Passive to Active

The Trump administration established a national Bitcoin reserve through an executive order, but the current reserve sources are limited. According to Wood, the existing reserve is entirely derived from assets confiscated by law enforcement, which means the government is essentially “picking up the leftovers” rather than proactively deploying.

However, the established goal is to hold 1 million BTC. At current prices, 1 million BTC is worth about $91.2 billion. This scale indicates that the U.S. government’s strategic intent is not a temporary measure but a long-term allocation.

Government Support for Cryptocurrency Initiatives

The Trump administration’s actions in the crypto space have been accelerating:

• Establishing a national Bitcoin reserve and crypto asset holdings
• Creating a crypto and AI working group led by David Sacks
• Promoting legislation like the GENIUS Act for stablecoins
• Signing multiple executive orders

These measures show that cryptocurrencies have risen from market topics to strategic government issues.

Why Buy Now

Political Cycle Considerations

Wood pointed out that Trump will continue to focus on crypto issues under midterm election pressures. Her logic is: Trump does not want to be a “lame-duck president” but hopes for one or two more productive years in office. Within this time window, he views cryptocurrencies as “a pathway to the future.”

This is not just a political gesture but has a practical basis. The crypto community played a significant role in Trump’s victory in the presidential election, and his and his family’s interests in the crypto industry are deepening. All these factors point to the government continuing to strengthen support for crypto.

Market Size Support

Data shows that Bitcoin has developed enough market depth to accommodate government-level purchases. Currently, BTC’s market cap is $1.82 trillion, with a 24-hour trading volume of $4.269 billion. This scale is sufficient for the government to make large-scale purchases in batches without causing severe market volatility.

If the Government Truly Starts Buying

Potential Market Impact

Ongoing government-level purchases would change the demand structure for Bitcoin. Unlike institutional investors, government purchases are typically long-term strategic holdings, meaning these BTCs would enter a “dead-hold” state and not be sold easily.

This would further reduce the available supply in the market. The total supply of Bitcoin is capped at 21 million, with 95.11% already in circulation. If the U.S. government ultimately holds 1 million BTC, it would account for 4.8%. Considering other long-term holders and lost coins, liquidity would become even tighter.

Timing Is Critical

Wood stated that the government will “eventually start buying,” implying that purchases will not begin immediately. It may take time for the government to complete legislative processes, determine purchase mechanisms, and allocate budgets. This process could take months or even longer.

Summary

Cathie Wood’s prediction reflects a broader trend: Bitcoin is shifting from a market asset to a national strategic asset. The transition from no active purchases to active procurement appears to be a change in approach, but in essence, it signifies an upgrade in the government’s recognition of Bitcoin’s role.

The key questions now are: When will the government initiate market purchases? What will be the scale and pace? Will this trigger other countries to follow suit? The answers to these questions will directly influence Bitcoin’s long-term supply and demand dynamics.