CoSatoshi on Nostr: Though it's not without it's challenges: Financial experts are skeptical about ...

Though it's not without it's challenges:

Financial experts are skeptical about Bitcoin's volatility, citing potential risks to the U.S. economy if the value of the proposed 1 million BTC reserve fluctuates dramatically.

The bill's funding mechanism, which involves using Federal Reserve net earnings and revaluing gold certificates, could face opposition from fiscal conservatives concerned about altering monetary policy.

Legal and regulatory hurdles exist, as the Treasury Secretary would need to navigate existing financial laws to manage and hold Bitcoin for a 20-year minimum, potentially requiring new legislation.

Some industry watchers, including crypto analysts, worry the government’s involvement could distort Bitcoin markets, reducing public trust and market efficiency without clear, transparent frameworks.

President Trump’s recent executive order for a Bitcoin reserve has drawn criticism, and the BITCOIN Act’s alignment with this order could face resistance from those opposing government crypto stockpiles.

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The Bitcoin Act, first introduced by Senator Lummis in July 2024 and reintroduced today, March 11, 2025, aims to establish a Strategic Bitcoin Reserve for the United States. The core idea is to position Bitcoin as a national asset to strengthen the U.S. dollar, hedge against inflation, and even help tackle the national debt. Here’s what the bill lays out in plain terms:

Bitcoin Purchase Program: The U.S. Treasury would buy up to 1 million Bitcoins over a five-year period. That’s about 5% of Bitcoin’s total supply (since there will only ever be 21 million BTC). The purchases would cap at 200,000 BTC per year to keep things gradual.
Long-Term Holding: Once acquired, the government would hold these Bitcoins for at least 20 years. The idea is to treat it like a strategic asset (think of it as digital gold), not something to flip for quick cash. There are strict rules limiting when or how it could be sold after that 20-year mark.

Secure Storage: The bill sets up a decentralized network of secure Bitcoin vaults managed by the Treasury Department. These would have top-tier physical and cybersecurity measures to protect the stash. It even includes plans for handling Bitcoin forks or airdrops (those quirky blockchain events), with a five-year retention period for any resulting assets.
Funding the Plan: No new debt here—the purchases would be funded by reallocating existing federal assets. Specifically, it taps into the Federal Reserve’s gold certificates (valued at $42.22 per ounce since 1973 but worth way more now—around $2,700 per ounce today) and uses profits from reissuing them at current market value. From 2025 to 2029, the first $6 billion of annual Federal Reserve remittances to the Treasury would also go toward buying BTC.

Transparency: The Treasury would have to publish quarterly reports showing total holdings, transactions, and proof of reserves—leveraging Bitcoin’s blockchain to make it all verifiable in real-time. This is meant to build trust and accountability.

Self-Custody Rights: The bill explicitly protects the rights of private Bitcoin holders to keep their own keys and manage their own wallets. It’s a nod to the crypto community’s “not your keys, not your coins” ethos, ensuring the reserve doesn’t mess with individual freedoms.

State Participation: States could opt in to store their own Bitcoin reserves in segregated accounts under this framework, giving them a chance to join the party.
Lummis has pitched this as a “game-changer” for U.S. financial stability, comparing it to the Louisiana Purchase for its potential long-term impact. She’s got some big-name backers, too—since its reintroduction today, posts on X show new cosponsors like Senators Marsha Blackburn, Bernie Moreno, Roger Marshall, Jim Justice, and Tommy Tuberville jumping on board, plus a companion bill in the House with support from reps like Nick Begich and Mike Collins. The timing’s hot with a crypto-friendly administration in place since January 2025, and Lummis has been vocal about pushing it through fast—possibly within the first 100 days of the new Congress.