Washington, the U.S. has reintroduced the Bitcoin Act, proposing to acquire 1 million BTC over 5 years if the proposal is passed. This legislation aims to establish a Strategic Bitcoin Reserve, purchasing 1 million Bitcoin (5% of the total supply) and holding it for at least 20 years to strengthen the nation’s finances. But how will this proposal impact the Bitcoin market and the global cryptocurrency landscape?
What is the Bitcoin Act and why does the U.S. want to buy 1 million BTC?
The “Bitcoin Act” (Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide Act) is an initiative to create a Strategic Bitcoin Reserve. It proposes that the U.S. Treasury will buy 1 million Bitcoin over 5 years, or about 200,000 BTC annually, using funds from the Federal Reserve system and other financial resources. The Bitcoin will then be held for a minimum of 20 years to bolster the U.S. financial position and address the country’s massive national debt, which exceeds $36 trillion.
Supporters see Bitcoin as a “digital store of value,” similar to gold, and believe accumulating it will position the U.S. as a leader in the global cryptocurrency revolution. However, the proposal has sparked debate due to Bitcoin’s volatility and cybersecurity risks.
Potential impact on the Bitcoin market
If the Bitcoin Act 2025 is approved by Congress, buying 1 million BTC over 5 years could trigger significant market volatility. With Bitcoin currently priced at around $80,846 per coin, the cost to acquire 1 million BTC would exceed $80.8 billion – a massive investment that could drive Bitcoin’s price higher due to reduced supply. This large-scale acquisition might create a supply shock, attracting institutional investors and fueling bullish sentiment, but it could also strain market liquidity in the short term.
The cryptocurrency community has already reacted strongly. A recent post asked, “How do you think the market will react if enacted?” Comments highlight expectations of price fluctuations, FOMO (Fear of Missing Out), and long-term value growth as Bitcoin supply tightens. However, critics warn that large government purchases could cause short-term instability, especially for smaller tokens like XRP and Cardano, which have lower liquidity, potentially leading to broader market uncertainty.
Supporting and opposing views
Proponents argue that the proposal will “supercharge” the U.S. dollar and lay the foundation for the country’s economic future. They highlight Bitcoin’s capped supply of 21 million coins as a strategic asset to protect national wealth against inflation and economic uncertainty. This move, they say, could position the U.S. as a leader in digital finance, shielding the economy from traditional monetary risks while boosting investor confidence.
On the other hand, skeptics, cited in financial reports, caution about Bitcoin’s high volatility, the substantial costs of securing such a reserve, and potential negative effects on other financial markets if Bitcoin’s price drops sharply. They worry that the government’s involvement could amplify market swings, increase cybersecurity risks, and destabilize traditional assets, posing broader economic challenges.
The future of Bitcoin Act 2025
Currently, the Bitcoin Act requires Congressional approval, a process that could face legal and financial hurdles, including debates over budget allocations and regulatory oversight. If successful, this proposal could reshape U.S. economic strategy by integrating Bitcoin into national reserves, influencing Bitcoin’s price in 2025 and beyond, as well as the role of cryptocurrencies globally. It might encourage other nations to adopt similar strategies, altering the global financial landscape. Investors and traders are closely watching, as Bitcoin’s price could rise or fall depending on policy developments, market sentiment, and legislative outcomes.
The proposal to acquire 1 million BTC over 5 years if passed marks a turning point in U.S. cryptocurrency policy. While controversial, it signals Bitcoin’s growing role as a national economic asset. Stay tuned to MEVX Trader for the latest updates on Bitcoin Act 2025 and its impact on the Bitcoin market.
