Bill would remove 5% of Bitcoin supply from circulation for 20 years. Treasury must buy up to 1M BTC in cold storage. Senate Banking Committee mark-up is the next trigger.
A new legislative proposal in the U.S. Congress directs the Treasury Department to acquire up to 1 million bitcoin, roughly 5% of the total circulating supply, and hold the assets in cold storage for at least 20 years. The bill is designed to create a strategic Bitcoin reserve that cannot be liquidated by a future administration for short-term fiscal reasons. If enacted, the federal government would become the single largest Bitcoin holder, and the market would need to absorb the buying pressure required to reach that target.
The proposal goes well beyond previous studies or working groups that explored a federal digital asset stockpile. It mandates actual accumulation and a mandatory lock-up, effectively removing a major chunk of liquid supply from the market for two decades. The acquisition mandate is not a one-time purchase. The bill authorizes the Treasury to acquire bitcoin over time, up to the 1 million cap. At current market prices, that represents tens of billions of dollars in buying – a structural demand shock that would tighten available supply on exchanges. The requirement that all acquired bitcoin be stored in cold storage removes the risk of government hacking or misuse and prevents the Treasury from using the assets for settlement or trade. This echoes the logic behind the Strategic Petroleum Reserve, where physical assets are stockpiled for national resilience, not for market intervention.
The scale alone changes the conversation around U.S. crypto policy. Previous bills focused on regulatory clarity or tax treatment. This one puts direct sovereign accumulation on the table, shifting the debate from whether the government should hold crypto to how much.
The acquisition mandate forces the Treasury to buy bitcoin over time until it holds 1 million BTC. At current market prices, that total exceeds $60 billion in purchases, assuming a rough price of $60,000 per bitcoin. The buying would likely be spread out to avoid moving the market too sharply, yet the sheer size represents a structural demand shock that would tighten available supply on exchanges. Retail and institutional holders would compete with the U.S. government for a limited pool of liquid bitcoin. The cold storage requirement means those coins will never be traded, lent, or staked. They are effectively removed from the float for 20 years. This creates a permanent reduction in the available supply that traders must factor into their positioning.
The proposal also addresses custody concerns that have plagued other government cryptocurrency holdings. By requiring physical storage in cold wallets, the bill avoids the risks associated with third-party custodians or hot wallets. This is a direct response to recent high-profile exchange hacks – including a cross-exchange $6.7 million incident that hit Coinbase and Kraken users – and the general skepticism about centralized custody. The cold storage mandate eliminates the risk of a government wallet being compromised, a key requirement for the reserve to function as a long-term store of value.
The 20-year minimum holding period is the bill’s central political safeguard. Without it, a future administration could sell the reserve to fund other programs or to score short-term budget wins. The lock forces a generational commitment, regardless of which party controls the White House. For traders, this creates a predictable supply reduction: roughly 5% of total Bitcoin supply will be held indefinitely, not traded or staked. That is a permanent shift in the supply-demand balance, assuming the bill becomes law.
The cold storage requirement also addresses the custody concerns that have plagued other government cryptocurrency holdings. By requiring physical storage, the bill avoids the risks associated with third-party custodians or hot wallets. This is a direct response to recent high-profile exchange hacks and the general skepticism about centralized custody.
The bill now heads to the Senate Banking Committee, where its fate will be decided. Similar legislation, like the CLARITY Act, has faced a tight window for a Senate vote, with a possible mark-up in June. The committee’s composition matters: bipartisan cosponsors would signal enough support to advance to a floor vote. A purely partisan bill is unlikely to move. The market will watch for committee assignments and public statements from key senators.
If the bill gains traction, expect bitcoin and the broader crypto market to react. A breakout above recent price resistance on news of committee progress would indicate traders are pricing in a non-negligible probability of passage. If the bill stalls, the price impact will fade, the proposal itself will remain a reference point for future reserve legislation. The decision point is the committee markup: either the bill advances and becomes a real catalyst, or it joins the pile of failed crypto bills.
For traders building a watchlist, this proposal is a long-duration catalyst with a clear trigger. Track the bill’s cosponsors and the committee schedule. As with any legislative risk, the market will price the probability in advance – the real move often comes on the first procedural vote, not the final floor vote. The Bitcoin profile and related legislative developments from the CLARITY Act's timeline provide context for how such catalysts typically unfold.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.