Author: Luke, Mars Finance
In March 2025, U.S. Senator Cynthia Loomis reignited the conversation around Bitcoin by resubmitting the Bitcoin Act to the Senate. This legislative proposal aims to establish a strategic Bitcoin reserve, with a bold plan to purchase 1 million Bitcoins over the next five years. Loomis’s initiative not only builds on her previous efforts in 2024 but also incorporates significant adjustments that have sparked widespread discussion and debate within the financial community. This article delves into the historical context of the bill, the key changes in its new version, and the potential implications of purchasing 200,000 Bitcoins annually on the cryptocurrency’s market price.
Historical Context and Key Changes in the Bitcoin Act
Senator Cynthia Loomis, a Republican from Wyoming, has emerged as a prominent advocate for Bitcoin policy since 2024. Her initial proposal, the Bitcoin Act of 2024, sought to create a “Strategic Bitcoin Reserve,” akin to the Strategic Oil Reserve, through government purchases of Bitcoin. The objective was to position Bitcoin as “digital gold,” enhancing the United States’ competitive edge in the global financial landscape while offering a novel solution to the national debt crisis. The original bill proposed acquiring 1 million Bitcoins, representing about 5% of the total supply at that time, funded by reallocating earnings from the Federal Reserve and through gold revaluation.
Unfortunately, the 2024 version faced significant hurdles, ultimately being blocked in congressional committees and expiring at the end of the 2023-2024 session without a vote.
In March 2025, Loomis reintroduced the Bitcoin Act, now dubbed the Bitcoin Act of 2025. While retaining the core goal of purchasing 1 million Bitcoins within five years, the new version includes several critical changes aimed at addressing previous criticisms and enhancing the bill’s enforceability. Notably, these changes align with an executive order signed by President Trump in March 2025, which also sought to establish a strategic Bitcoin reserve.
Key Changes in the 2025 Version
Stricter Purchase Requirements: The 2024 version allowed for the purchase of “up to” 200,000 Bitcoins per year, introducing flexibility that could lead to delays. The 2025 version mandates the purchase of 200,000 Bitcoins annually, ensuring a total of 1 million over five years. This shift from “flexible” to “mandatory” underscores lawmakers’ commitment to implementing the reserve as planned.
Enhanced Holding Requirements: The previous bill permitted the sale of Bitcoin to repay federal debt instruments after a minimum holding period of 20 years. The 2025 version eliminates this exception, prohibiting any sale, exchange, or disposal of Bitcoin for 20 years. This change reinforces the strategic intent of holding Bitcoin as a long-term asset.
Coordination with the Exchange Stabilization Fund (ESF): The new version introduces a coordination clause with the ESF, allowing the use of its approximately $39 billion reserve fund to support Bitcoin purchases. This addition reflects a diversification of funding sources and indicates a broader acceptance of Bitcoin within national financial strategies.
Use of Gold Revaluation Proceeds: The 2024 version included proceeds from the Federal Reserve’s gold revaluation in the general fund. The 2025 version specifies that these proceeds—potentially up to $747.3 billion—will be exclusively allocated to the Bitcoin purchase program, highlighting Bitcoin’s strategic importance.
These modifications not only reflect Loomis’s unwavering support for Bitcoin but also demonstrate a strategic response to the growing enthusiasm for cryptocurrency within U.S. political circles.
Detailed Analysis of the New Version of the Bill
To better understand the implications of the 2025 Bitcoin Act, let’s analyze the key changes in detail.
Stricter Purchase Requirements: From “Most” to “Must”
The transition from a flexible purchase plan to a mandatory one is significant. By requiring the purchase of 200,000 Bitcoins annually, the government aims to ensure timely implementation of the Bitcoin reserve. This commitment aligns with the strategic positioning of Bitcoin as “digital gold,” mirroring the U.S. gold reserves. However, this mandatory approach may exert pressure on market liquidity, necessitating careful execution through methods like batch purchases or over-the-counter transactions to minimize market disruption.
Enhanced Holding Requirements: Eliminating Debt Repayment Exceptions
The removal of the provision allowing the sale of Bitcoin to repay federal debt instruments strengthens the long-term holding strategy. By enforcing a 20-year holding period, the bill positions Bitcoin as a stable store of value, akin to gold. However, this strict requirement may raise concerns about the government’s flexibility during economic crises, potentially limiting its ability to utilize Bitcoin as a financial tool.
Coordination with the Exchange Stabilization Fund (ESF)
The inclusion of the ESF coordination clause marks a significant shift in funding strategy. By allowing the use of this emergency reserve fund for Bitcoin purchases, the government signals its intent to integrate Bitcoin into national financial strategies. However, this move could spark controversy regarding the ESF’s original purpose, which was to stabilize exchange rates and respond to financial crises, rather than to invest in cryptocurrencies.
Adjustments in the Use of Gold Revaluation Proceeds
The revaluation of the Federal Reserve’s gold reserves presents a unique funding opportunity for the Bitcoin purchase program. By explicitly allocating the proceeds from this revaluation to Bitcoin purchases, the 2025 version underscores Bitcoin’s strategic value. However, fluctuations in gold prices could impact the final amount available for Bitcoin acquisitions, necessitating further legislative adjustments.
Potential Market Impact of Annual Bitcoin Purchases
If the Bitcoin Act is passed, the U.S. government’s commitment to purchasing 200,000 Bitcoins annually could significantly influence the cryptocurrency’s market price. As of March 2025, the circulating supply of Bitcoin is approximately 19.2 million, with a price of $83,000 per coin, resulting in a total market value of $1.6 trillion. The annual purchase of 200,000 Bitcoins translates to an investment of approximately $1.66 billion, which, while seemingly small relative to the total market, could create substantial market dynamics.
Supply and Demand Dynamics
Increased Demand: The annual purchase of 200,000 Bitcoins represents about 1.04% of the total supply. If market liquidity is limited, this demand could rapidly drive prices upward, particularly given Bitcoin’s halving mechanism, which restricts supply growth.
Market Reaction: Historical precedents suggest that favorable policies and large-scale purchases can lead to significant price increases. For instance, Japan’s legalization of Bitcoin in 2017 and institutional adoption in 2020-2021 resulted in price surges of 10%-50% or more. The combination of mandatory purchases and political support may trigger a “fear of missing out” (FOMO) effect, further propelling prices.
Price Predictions
Based on supply and demand models, several scenarios can be anticipated:
Short-term (1-3 months): If the market reacts positively to the bill’s passage, prices could rise by 10%-33%, reaching between $91,300 and $110,000 per coin. Concentrated purchases could push prices above $100,000, especially in a shallow order book environment.
Medium-term (1-2 years): Continued government purchases and heightened market confidence could see prices soar to $120,000-$150,000 per coin, particularly if institutional and retail investors follow suit.
Long-term (5 years): The cumulative effect of purchasing 1 million Bitcoins, combined with macroeconomic factors, could push prices above $200,000 per coin, especially during a bull market cycle.
Final Outlook
The passage of the Bitcoin Act could herald a new era for Bitcoin, with the U.S. government’s annual purchase of 200,000 Bitcoins likely driving prices to unprecedented heights. Short-term projections suggest prices could exceed $110,000 per coin, while medium-term forecasts indicate potential values of $150,000 or more. In the long run, the strategic acquisition of 1 million Bitcoins could redefine Bitcoin’s status as a global asset, significantly impacting the U.S.’s leadership in the digital currency space.
As the legislative process unfolds, the actual market response will depend on various factors, including purchasing strategies and the broader economic environment. Nonetheless, Senator Loomis’s Bitcoin Act represents a pivotal moment in the evolution of cryptocurrency policy in the United States.
Disclaimer: This article reflects the opinions of the author and does not constitute investment advice. The views expressed herein are solely those of the author and do not represent the stance of any organization.
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