Author: Luke, Mars Finance
In March 2025, U.S. Senator Cynthia Lummis resubmitted the BITCOIN Act to the Senate, attempting to establish a strategic Bitcoin reserve through legislation. This move not only continued her original intention in 2024, but also made key adjustments in details, sparking widespread discussion and market debate. This article will deeply interpret the historical background of the bill, the changes in the new version, and the profound impact that the plan to purchase 200,000 bitcoins per year may have on the price of Bitcoin.
History of the Act, what changes have been made in the new version
As a Republican senator from Wyoming, Cynthia Loomis has been an active promoter in the field of Bitcoin policy since 2024. In July 2024, she first proposed the BITCOIN Act of 2024, which aims to establish a "Strategic Bitcoin Reserve" similar to the Strategic Oil Reserve through the government's purchase of Bitcoin. The goal of this proposal is to use Bitcoin as "digital gold" to enhance the United States' competitive advantage in the global financial system while providing a new solution to the national debt. The bill proposes to purchase 1 million Bitcoins (1,000,000 BTC) within five years, accounting for about 5% of the total supply of Bitcoin at the time, and to achieve this goal by redirecting funds from the Federal Reserve System's earnings and gold revaluation. However, the 2024 version of the bill was blocked in congressional committees and eventually "expired" at the end of the 2023-2024 session and failed to pass.
In March 2025, Loomis resubmitted the bill and launched the Bitcoin Act of 2025. The new version retains the core goal - to purchase 1 million bitcoins within five years - but makes several key changes in the details. These changes are intended to respond to previous criticisms, strengthen enforcement, and echo the executive order signed by President Trump in March 2025 to establish a strategic Bitcoin reserve. Here are the main changes in the new version:
- Stricter purchase plan: The 2024 version allows the purchase of "up to" 200,000 Bitcoins per year, while the 2025 version explicitly requires the purchase of 200,000 Bitcoins per year, totaling 1 million Bitcoins in five years. This change from "flexible" to "mandatory" shows the legislators' determination to enforce the law.
- Strengthening holding requirements: The 2024 version allowed the sale of Bitcoin to repay federal debt instruments within a minimum holding period of 20 years, but the 2025 version deleted this exception and prohibited the sale, exchange, or disposal of Bitcoin for any purpose within 20 years. This strengthens the strategic intention of "holding for the long term" (HODL).
- New coordination with the Exchange Stabilization Fund (ESF): The 2025 version adds a coordination clause with the Exchange Stabilization Fund (ESF), allowing the use of this approximately $39 billion reserve fund to support Bitcoin purchases. This clause was not mentioned in the 2024 version, reflecting the new version's diversification of funding sources.
- Use of gold revaluation proceeds: The 2024 version includes the proceeds from the Federal Reserve's gold revaluation into the general fund, while the 2025 version explicitly stipulates that these proceeds (potentially up to $747.3 billion) will be used exclusively for the Bitcoin purchase program. This is a major policy adjustment that highlights the importance of Bitcoin as a strategic asset.
These changes not only reflect Loomis' support for Bitcoin policy, but also represent a strategic adjustment made in light of the current surge in enthusiasm for Bitcoin in U.S. political circles (such as Trump's support and the community's positive response).
Detailed interpretation of the new version of the bill
In order to more clearly understand the amendments to the 2025 version of the Bitcoin Act, we analyze these key changes one by one and the logic and impact behind them.
More stringent purchasing plans: from "most" to "must"
The 2024 version of the Bitcoin purchase plan is set at a "maximum" of 200,000 Bitcoins per year, which provides the Treasury with flexibility to adjust purchases based on market conditions. However, this flexibility may also lead to poor implementation or delays. The 2025 version changes this clause to "must" purchase 200,000 Bitcoins, totaling 1 million Bitcoins over five years. This change indicates that lawmakers hope to ensure that the government implements the establishment of Bitcoin reserves as planned through legal mandatory requirements.
This modification is intended to avoid delays and market uncertainty and ensure the rapid realization of strategic Bitcoin reserves. 200,000 bitcoins per year account for approximately 1.04% of the current total supply of Bitcoin (approximately 19.2 million), and a total of 1 million accounts for 5.19%. This scale matches the US gold reserves (approximately 8,133.5 tons, accounting for nearly a quarter of global gold reserves), reflecting the strategic intention to position Bitcoin as "digital gold". However, mandatory purchases may put pressure on market liquidity, and disturbances need to be reduced through transparent and strategic means (such as batch purchases or over-the-counter transactions).
Strengthening holding requirements: removing the debt repayment exception
The 2024 version allows Bitcoin to be sold to repay federal debt instruments within a minimum holding period of 20 years, an exception that provides flexibility to the government but also weakens the commitment to long-term holding of Bitcoin as a strategic asset. The 2025 version deletes this clause and explicitly stipulates that Bitcoin cannot be sold, exchanged, auctioned or disposed of for any purpose within 20 years.
This change strengthens Bitcoin's positioning as a "long-term store of value", consistent with the concept of "digital gold". The 20-year holding period is intended to ensure Bitcoin's long-term appreciation potential and provide a stable strategic asset for the U.S. economy. However, this strict requirement may be controversial because it limits the government's ability to flexibly use Bitcoin in economic crises, such as to repay national debt or respond to emergencies.
New coordination with the Exchange Stabilization Fund (ESF)
The 2025 version adds a new coordination clause with the Exchange Stabilization Fund (ESF), allowing the use of this reserve fund (about $39 billion) to support Bitcoin purchases. The ESF is an emergency reserve fund used by the Ministry of Finance to stabilize exchange rates and financial markets, usually used to intervene in the foreign exchange market or support international financial stability.
This amendment expands the source of funds and provides additional financial support for Bitcoin purchases. The inclusion of the ESF indicates that the government plans to consider Bitcoin as part of the national financial strategy and may directly purchase Bitcoin through administrative orders or market operations. However, this move may trigger controversy about the use of the ESF, as its original intention was not to invest in cryptocurrency, but to respond to the financial crisis.
Adjustment of the use of gold revaluation proceeds
The "revaluation" of the Federal Reserve gold refers to the revaluation of the gold reserves held by the Treasury (approximately 8,133.5 tons) from the legal price (US$42.2222/ounce) to the current market price (approximately US$2,900/ounce in March 2025). This revaluation will generate a book gain of approximately US$747.3 billion (market value of approximately US$758.3 billion minus book value of US$11 billion).
The 2024 version incorporates these proceeds into the general fund, while the 2025 version explicitly uses them for the Bitcoin purchase plan. This adjustment reflects strong support for the strategic reserve of Bitcoin and provides a strong funding basis for the "budget neutrality" of the bill. However, fluctuations in the price of gold (which may rise to $3,500/ounce or fall to $2,500/ounce) may affect the final available amount, requiring further legislative refinement.
Strictly speaking, the bill does not require the gold reserves to be "sold" directly. The gold will remain in the Treasury's reserves and continue to be held as a national asset. The revaluation is just an accounting adjustment, which puts the market value of the gold back on the Treasury's balance sheet and uses the increased value to purchase Bitcoin.
However, from an economic perspective, this process is similar to "indirectly selling the value of gold" to buy Bitcoin, because the book value of gold is converted into cash or equivalent for Bitcoin market transactions. These modifications collectively reflect the comprehensive upgrade of the 2025 version of the Bitcoin Act in terms of enforcement, strategic positioning, and funding guarantees, laying a more solid foundation for establishing a strategic Bitcoin reserve.
Where will the annual buying of 200,000 coins push Bitcoin?
If the Bitcoin Act is passed, the US government's purchase of 200,000 bitcoins each year will have a profound impact on the price of bitcoin.
As of March 2025, the circulating supply of Bitcoin is approximately 19.2 million, the price is $83,000 per coin, and the total market value is $1.6 trillion. Bitcoin's daily trading volume is usually between $20 billion and $50 billion (assuming $35 billion), and the purchase amount of 200,000 Bitcoins per year is 200,000 × 83,000 = $1.66 billion, a total of $8.3 billion in five years. This is 1.04% (per year) or 5.19% (five years) of the total market value, which is relatively small, but continuous purchases may trigger a chain reaction in the market.
Supply and demand dynamics analysis
- Increased demand: 200,000 bitcoins per year is about 1.04% of the total supply, and if market liquidity is limited, this demand could quickly push up prices. Bitcoin's supply growth is limited by the halving mechanism every four years (currently 6.25 BTC is produced every 10 minutes), and most bitcoins are held for a long time (HODLers), with low liquidity.
- Market reaction: Historical data (such as Japan's legalization of Bitcoin in 2017 or institutional adoption in 2020-2021) show that favorable policies and large-scale buying can cause prices to rise by 10%-50% or more in the short term. The synergy of mandatory purchases in the 2025 version of the bill and Trump's executive order may trigger a "fear of missing out" (FOMO) effect, further pushing up prices.
Price Prediction
Based on supply and demand models and market sentiment, we can speculate the following scenarios:
- Short-term (1-3 months): If the market reacts strongly to the passage of the bill, the price may rise by 10%-33% to $91,300-110,000/coin. The daily buying of about $45.48 million ($1.66 billion/365 days) accounts for 0.013% of the daily trading volume, but if the purchase is concentrated, it may push up the high price (above $80,000) with shallow order book depth, causing the price to break through $100,000.
- Medium term (1-2 years): With continued government purchases and increased market confidence, prices could reach $120,000-150,000 per coin (45%-81% increase). If institutions and retail investors follow suit, prices could soar further.
- Long term (5 years): Buying 1 million bitcoins (5.19% of supply) over five years, combined with supply reduction and macroeconomic factors (such as inflation or a depreciating dollar), could push the price above $200,000 per bitcoin, especially in a bull cycle.
Final Outlook
After the passage of the Bitcoin Act, the US government's annual purchase of 200,000 bitcoins is likely to push the price of bitcoin to a new high, possibly exceeding $110,000 per coin in the short term, reaching $150,000 per coin in the medium term, and reaching more than $200,000 per coin in the long term. However, the actual price is highly dependent on market reaction, purchasing strategy, and external economic environment. This move may not only reshape the global status of Bitcoin, but will also have a far-reaching impact on the US's leadership in the field of digital currency.
