We welcome back Senator Cynthia Lummis for reintroducing her Bitcoin Act. This unprecedented move is igniting spirited debate on what government purchases of Bitcoin might mean for the value of Bitcoin. The legislation, which is short and simple, would have the U.S. government purchase one million Bitcoin (BTC) within five years. This is no small potatoes, as this represents nearly 5% of the current Bitcoin supply. This new move is largely driven by gold revaluation profits. It has the potential to radically change the crypto-commerce landscape and push Bitcoin’s price to $1 million per coin.
The Bitcoin Act: A Bold Proposal
The Bitcoin Act, initially introduced by Senator Lummis in July 2024 and recently reintroduced in March, outlines a strategy for the U.S. government to strategically invest in Bitcoin. The Act wants to purchase one million BTC in the next five years. It intends to pay for this ambitious plan by revaluing the nation’s gold reserves. This acquisition would be equivalent to 2.3% of the entire Bitcoin supply, likely resulting in major price appreciation.
If the U.S. government follows through with the Bitcoin Act, the U.S. Federal Government's balance sheet would benefit significantly should Bitcoin's value rise. Private sector stakeholders, as well, Bitcoin miners and companies would become incredibly wealthy overnight. Even Eric Trump is feeling bullish on Bitcoin, saying that it will eventually hit $1 million.
Ripple Effects on the Global Stage
Yet the ramifications of a possible, even if unlikely, large-scale Bitcoin buy by the U.S. government would ripple far beyond U.S. domestic financial markets. Such a purchase will not be lost on other states. Bitcoin has unique attributes that should make it extremely attractive to central banks. Its historical resistance to censorship, artificially limited supply, and deep liquidity are major reasons in this attraction.
If the U.S. government follows through on its Bitcoin accumulation plan, it may initiate a domino effect. Other central banks will probably follow suit and increase their own Bitcoin reserves too. This domino effect could further Bitcoin’s price trajectory, possibly even bringing the crack $1 million valuation in a few analysts’ forecasts.
Expert Opinions and Market Projections
Read more opinions from financial analysts and asset managers on what the Bitcoin Act might do. This prediction, made by experts such as Lyn Alden and most recently by asset management firm Bernstein of Bitcoin rising to $1 million has gotten plenty of headlines. These projections are based on the premise that increased institutional adoption, particularly by governments and central banks, will drive demand and scarcity, ultimately leading to significant price appreciation.
It’s in this context that the U.S. government has made waves with a very real announcement of a plan to buy one million Bitcoin. This move would signal continued investor confidence in the asset, possibly pushing Bitcoin prices to all-time highs. This situation sells the fortune of the Bitcoin Act and how it can pave the way for a more secure and stable crypto market.
