5 Reasons Why the U.S. Government Should Start a Bitcoin Reserve – But Probably Won’t

As the private sector becomes immersed with the cryptocurrency market, the public sector is looking to follow in its footsteps. Under the Trump administration, there has been a great deal of buzz over the possibility of a Bitcoin reserve. With the bitcoin price having proven its ability to trade above $100,000 per coin for the first time at year-end 2024, crypto investors are salivating at the idea of entire governments piling into the leading cryptocurrency.

Indeed, President Trump has unveiled plans for a Strategic Bitcoin Reserve, one comprised of bitcoin as well as other digital assets like XRP, Solana and Cardano, treating them as reserve assets like gold. But for a government that prides itself on transparency, there’s been no indication that the bitcoin reserve is being filled yet.

So what does a bitcoin reserve look like exactly? Similar to any type of reserve, a bitcoin reserve would be a stockpile of the digital asset that the U.S. government could access to stabilize the economy during a period of tumult. These reserves are often associated with commodity assets, like the precious metal gold, and bitcoin has been designated to fall into the same camp.. 

If it follows through, the U.S. government would be joining a growing lineup of companies in the private sector that are adding BTC to their balance sheets. Most recently, signs have emerged of sovereign wealth funds following suit. However, the crypto community might not want to hold its breath, as the chances of the U.S. government, which has been known to move at a snail’s pace, prioritizing a bitcoin reserve now are slim. 

Reason No. 1: Economic Uncertainty 

If there was ever a time of economic uncertainty, it’s now. With the Russia/Ukraine war yet to come to an end, and heightened unrest in the Middle East, geopolitical tensions are high. The Trump administration’s tariff strategy has ignited yet another layer of uncertainty, causing the stock market to get off to a bumpy start in 2025. With the threat of an economic recession looming, consumers are beginning to show signs of buckling under the pressure, and corporate America is bracing for the worst – a recession.

Given the bitcoin reserve’s role to serve as a backstop for the economy in a time of disaster, it seems that now would be as good a time as any for the U.S. Treasury to begin buying BTC. With each passing day that it does not, the U.S. government is communicating that it is in no rush to start building its Strategic Bitcoin Reserve. 

Reason No. 2: Scarcity 

Bitcoin has earned the nickname as digital gold for a reason – there is a limited supply of these assets. According to the Satoshi Nakamoto white paper, there are only 21 million bitcoin ever to be mined. With hundreds of BTC mined each day, the scarcity component is yet another reason why the U.S. government should create a bitcoin reserve sooner than later — but it’s a double-edged sword. As time goes on, and bitcoin becomes more mainstream, the supply will diminish, and so too will the amount of BTC that the U.S. Treasury could add to the reserve.

Reason No. 3: Leadership 

Early-mover status is a real thing in the cryptocurrency community. The sooner that a nation moves with crypto-friendly legislation, the more they are likely to attract some of the top blockchain innovation that the world has to offer. Countries like Switzerland, El Salvador and Malta have already welcomed bitcoin innovation, while the U.S. regulatory framework has been more of a gray area. The more quickly that the U.S. could following through with its plans for a Strategic Bitcoin Reserve, the greater the chances that it could create a model for other countries to emulate in the years to come.

President Trump desires for the U.S. to become the “crypto capital of the world,” but the U.S. seemingly has yet to put its money where its mouth is in this regard. And with stiff competition from progressive governments, the U.S. has some catching up to do.

Reason No. 4: Government Programs 

With inflation running rampant in the economy over the past few years, the buying power of the U.S. dollar has been disappearing. Worse, with the tariff wars still in full swing, there could be further dollar weakness to come, according to Goldman Sachs economists. Given the number of social programs that the government supports, like Social Security and even welfare, a bitcoin reserve could help to offset dollar weakness. 

However, bitcoin doesn’t always live up to its reputation as an inflationary hedge, instead proving to trade more correlated with traditional asset classes. Over the past couple of years, bitcoin has been trading more like a risk-on asset, similar to a technology stock, than the inflationary hedge it was designed to be, giving the U.S. government further reason to stay on the fence. 

Reason No. 5: Taxpayer Relief 

With the launch of the Department of Government Efficiency, also known as DOGE, the U.S. government has proven its interest in saving the American people money. One way that they could further strengthen the country’s own balance sheet and thereby relieving the American taxpayers is to create a Strategic Bitcoin Reserve.

By building a bitcoin reserve, the U.S. government could benefit from the next bullish crypto cycle, strengthening its balance sheet and incentivizing policymakers to pass on that relief to taxpayers. With no shortage of bullish BTC price forecasts swirling, time is of the essence. Once FOMO kicks in, bitcoin has been known to make big swings quickly. The longer the U.S. Treasury waits to buy BTC, the greater the chances that it will be buying at the top, not the bottom of the price range.

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