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

The U.S. government has announced a Strategic Bitcoin Reserve, but there’s no signs of it being filled yet.

With each passing day, the U.S. government risks losing the chance to buy the leading cryptocurrency at the lower end of its price range.

A bitcoin reserve would give the U.S. government access to digital assets to stabilize conditions in the event of further economic turmoil.

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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.

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.

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.

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.

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.