In March 2025, US Senator Cynthia Lummis reintroduced the Bitcoin Reserve Act, proposing a strategic national reserve of 1 million BTC acquired over five years. This landmark legislation includes pivotal modifications from its 2024 draft — notably permitting gold/foreign exchange funds for BTC purchases and imposing a 20-year holding period.
Evolution of the Bitcoin Reserve Act: 2025 Revisions
Senator Lummis' revised bill introduces four critical upgrades to the original 2024 proposal:
Mandatory Annual Purchases
- 2024 Version: "Up to 200,000 BTC/year"
- 2025 Update: "Shall purchase 200,000 BTC/year" (5-year total: 1M BTC)
- Eliminates discretionary adjustments, ensuring consistent market impact
Strengthened Holding Requirements
- Removes 2024's debt-repayment exception clause
- New mandate: Zero sales/exchanges permitted for 20 years
- Aligns with "digital gold" long-term asset strategy
Exchange Stabilization Fund (ESF) Integration
- Authorizes use of the $39B ESF reserve
- Expands funding sources beyond Federal Reserve redirects
Gold Revaluation Dedication
- Directs $747.3B potential gold revaluation gains (8,133.5 tons at $2,900/oz)
- Exclusively funds BTC acquisitions vs. 2024's general fund allocation
Market Impact Analysis
Supply/Demand Dynamics
| Metric | Value | Market Share |
|---|---|---|
| Annual Purchase | 200,000 BTC ($16.6B) | 1.04% |
| 5-Year Cumulative | 1M BTC ($83B) | 5.19% |
| Daily BTC Circulation | 900 BTC ($74.7M) | 0.021% |
Price Projections
- Short-term (3mo): $91,300-$110,000 (10-33% surge)
- Mid-term (2yr): $150,000 (81% growth)
- Long-term (5yr): $200,000+ (140% potential)
Strategic Implications
Liquidity Pressure
- 547 BTC daily buys ($45.5M) may strain spot markets
- OTC/batch purchasing likely required
Institutional FOMO
- Government accumulation could trigger copycat strategies
- 2025's $350B daily trading volume provides absorption capacity
Monetary Policy Shift
- Positions BTC as Tier-1 reserve asset alongside gold
- Potential dollar hedge amidst inflation concerns
Frequently Asked Questions
Why prohibit sales for 20 years?
The mandate prevents short-term political exploitation, ensuring BTC functions as a generational reserve asset. Historical gold reserves demonstrate multi-decadal holding strategies' effectiveness.
How will gold revaluation work?
Treasury-held gold's book value ($42.22/oz) will adjust to market rates (~$2,900/oz), creating accounting gains without physical sales. These unrealized gains fund BTC purchases.
What happens if BTC prices crash?
The bill includes no price triggers. Consistent dollar-cost averaging over five years mitigates volatility risks, similar to sovereign wealth fund strategies.
👉 Discover how institutional BTC adoption is reshaping global finance
👉 Explore gold-backed cryptocurrency strategies for conservative investors
The revised Bitcoin Reserve Act represents a watershed moment in monetary policy, blending traditional reserve assets with digital innovation. Its passage could cement US leadership in the emerging digital economy while providing a blueprint for national cryptocurrency adoption.