Trump Administration's Bitcoin Reserve Strategy Signals Active Market Purchases Ahead

The Trump administration’s push toward building a national digital asset reserve has sparked significant debate about whether Washington will soon shift from merely holding confiscated cryptocurrencies to actively purchasing Bitcoin. Cathie Wood, CEO of ARK Invest, suggested on the Bitcoin Brainstorm podcast that the federal government is likely to begin buying Bitcoin to fund its strategic reserve, moving beyond the current approach of storing seized assets.

Wood emphasized that preliminary plans envisioned a reserve holding up to one million Bitcoins, but implementation has been limited so far. “There’s been hesitation about actually acquiring Bitcoin through market purchases,” she noted. “So far, all holdings come from law enforcement seizures. The initial goal was to own 1 million bitcoins, and I believe they will eventually start buying.”

The Policy Landscape: From Executive Order to Implementation

President Trump formalized the Strategic Bitcoin Reserve concept through an executive order in early 2025. The U.S. Treasury currently oversees approximately 198,000 BTC obtained through criminal forfeitures, making it one of the world’s largest government-held digital asset positions. However, no purchased Bitcoins have been added to this reserve. The Treasury and Commerce Departments were instructed to explore budget-neutral acquisition strategies, yet these remain largely dormant.

The administration also established a crypto working group led by Special Advisor David Sacks, which proposed expanded oversight of spot trading through enhanced CFTC authority. Several U.S. states, including Florida and Texas, are already developing their own digital asset reserve legislation, creating momentum for federal action.

Why Wood Expects Continued Crypto Momentum

Wood’s confidence in ongoing government support stems partly from Trump’s personal financial interests in the sector and the industry’s demonstrated political influence during the recent election cycle. She explained that the administration is unlikely to de-prioritize digital assets as it approaches the midpoint of its second term. “Trump wants to demonstrate productivity over the next two years,” Wood stated. “He views the crypto sector as essential to future economic innovation.”

Additional policy proposals being discussed include a de minimis exemption, which would exempt small-scale crypto transactions from capital gains tax reporting—a measure that could significantly broaden retail participation.

Market Dynamics and Institutional Stabilization

The crypto markets experienced notable volatility and flash crashes throughout 2025, yet Wood and ARK analyst Lorenzo Valente observed that incoming institutional participants bring different risk management approaches. These sophisticated actors, they argue, could help reduce dramatic price swings associated with retail-driven cycles.

Wood assessed 2025’s institutional adoption as modest but meaningful. Reflecting on Bitcoin’s performance relative to historical four-year cycles, she suggested that if the year concludes with a 30-plus percent correction rather than the typical 50-70 percent decline, “that represents a success.” This perspective highlights how institutional capital and policy support may be gradually reshaping cryptocurrency market dynamics, creating smoother adoption curves compared to earlier boom-bust patterns.