Introduction
In March 2025, U.S. Senator Cynthia Lummis reintroduced the BITCOIN Act to the Senate, proposing the creation of a Strategic Bitcoin Reserve through legislative action. This updated version builds upon her 2024 proposal while incorporating critical adjustments that have sparked market enthusiasm and policy debates. This analysis explores the bill’s evolution, key modifications, and the potential impact of annual 200,000 BTC purchases on Bitcoin’s price trajectory.
Key Updates in the 2025 Bitcoin Bill
1. Mandatory Purchase Requirements
- 2024 Version: Allowed up to 200,000 BTC annually (flexible).
- 2025 Version: Requires must purchase 200,000 BTC/year (rigid), totaling 1M BTC over 5 years.
Rationale: Ensures consistent execution and reduces market uncertainty.
2. Strengthened Holding Restrictions
- 2024 Exception: Permitted BTC sales to repay federal debt within 20 years.
- 2025 Change: Eliminates all disposal options—HODL-only for two decades.
Implication: Reinforces Bitcoin’s role as a long-term strategic asset akin to gold.
3. Funding Mechanism Enhancements
- Gold Revaluation: $7.47 trillion in gold reserves (market-adjusted) will fund BTC purchases (new in 2025).
- Exchange Stabilization Fund (ESF): $39B ESF now eligible for Bitcoin acquisitions (added in 2025).
Impact: Diversifies funding sources and aligns with Trump’s 2025 executive order on crypto reserves.
Market Implications of Annual 200K BTC Purchases
Supply-Demand Dynamics
| Metric | Value |
|---|---|
| Annual Purchase | 200K BTC (~1.04% of supply) |
| 5-Year Total | 1M BTC (5.19% of supply) |
| Current Price (2025) | $83,000/BTC |
| Daily Buy Pressure | ~$45.48M |
Price Projections
Short-Term (3–6 Months):
- Potential 10–33% surge to $91,300–$110K/BTC due to FOMO and liquidity constraints.
Mid-Term (1–3 Years):
- Sustained demand could push prices to $120K–$150K/BTC.
Long-Term (5 Years+):
- Scarcity + macroeconomic factors may drive prices beyond $200K/BTC.
FAQs
Q1: Will the U.S. sell its gold reserves to buy Bitcoin?
👉 No. The bill revalues existing gold holdings at market rates—no physical sales occur.
Q2: How does this compare to China’s digital currency strategy?
👉 The BITCOIN Act positions BTC as "digital gold," contrasting with China’s CBDC focus on transactional efficiency.
Q3: Could this trigger a global Bitcoin adoption wave?
👉 Historical data suggests policy leadership often accelerates institutional adoption—watch for EU/Asia responses.
Conclusion
Lummis’ 2025 bill marks a pivotal shift toward state-sponsored Bitcoin accumulation, with price impacts likely cascading from short-term volatility to long-term reevaluation of BTC as a reserve asset. The $7.47T gold reallocation underscores Bitcoin’s strategic parity with traditional stores of value—a potential game-changer for global finance.
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