Interpreting the new version of the Lummis bill - exchanging gold for Bitcoin, the United States must buy 200,000 BTC annually!

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 continues her original intention proposed in 2024 but also makes key adjustments in detail, triggering widespread discussions and market debates. This article will delve into the historical background of the bill, the modifications in the new version, and the profound impact that the plan to purchase 200,000 bitcoins annually may have on the price of Bitcoin.

What are the changes in the history of the bill, the new version?

As a Republican senator from Wyoming, Cynthia Lummis has been an active advocate in the Bitcoin policy space since 2024. In July 2024, she introduced the Bitcoin Act of 2024, aiming to establish a 'Strategic Bitcoin Reserve' similar to the strategic oil reserves by government purchase of Bitcoin. The goal of this proposal is to position Bitcoin as 'digital gold', enhance America's competitive advantage in the global financial system, and provide a new solution for national debt. The bill proposed to purchase 1,000,000 BTC within five years, approximately 5% of the total Bitcoin supply at that time, using funds redirected from Federal Reserve System earnings and gold revaluation. However, the 2024 version of the bill was stalled in Congress committees and ultimately 'lapsed' at the end of the 2023-2024 session without passing.

In March 2025, Loomis resubmitted the bill and introduced the 2025 version of the "Bitcoin Act". The new version retains the core goal of purchasing 1 million Bitcoins within five years, but makes several key modifications in detail. These modifications are aimed at addressing previous criticisms, strengthening enforcement, and aligning with the executive order signed by President Trump in March 2025 to establish a strategic Bitcoin reserve.

More stringent purchase plan: The 2024 version allows "up to 200,000 Bitcoins per year", while the 2025 version explicitly requires "shall purchase 200,000 Bitcoins per year", with a total of 1 million Bitcoins over five years. This change from "flexible" to "mandatory" demonstrates legislators' determination to enforce compliance.

Enhanced holding requirements: The 2024 version allows Bitcoin to be sold within the 20-year minimum holding period to repay federal debt instruments, but the 2025 version removes this exception clause, prohibiting the sale, exchange, or disposal of Bitcoin for any purpose within 20 years. This reinforces the strategic intent of 'HODL' (hold on for dear life).

Coordination with the Exchange Stabilization Fund (ESF) has been added: The 2025 edition adds provisions for coordination with the Exchange Stabilization Fund (ESF), allowing the use of the approximately $39 billion reserve fund to support Bitcoin purchases. This provision was not mentioned in the 2024 edition, reflecting the diversification of funding sources in the new version.

The purpose of revaluing gold reserves: The 2024 version will include the proceeds of the revaluation of federal reserve gold in the general fund, while the 2025 version specifically stipulates that these proceeds (potentially as high as $7,473 billion) will be used exclusively for the Bitcoin purchase plan. This is a significant policy adjustment, highlighting the importance of Bitcoin as a strategic asset.

These changes not only reflect Lumis's support for Bitcoin policy, but also strategic adjustments made in the current American political environment where enthusiasm for Bitcoin is high (such as Trump's support and the community's positive response).

Detailed Interpretation of the New Version of the Bill

To better understand the modifications of the 2025 version of the 'Bitcoin Act,' we will analyze these key changes one by one, along with their underlying logic and impact.

More stringent purchase plan: from 'maximum' to 'must'

The 2024 edition of the Bitcoin purchase plan sets a maximum of 200,000 Bitcoins per year, providing flexibility for the Treasury to adjust purchases based on market conditions. However, this flexibility may also lead to inadequate implementation or delays. The 2025 edition changes this clause to a requirement to purchase 200,000 Bitcoins annually, totaling 1 million over five years. This change indicates that lawmakers intend to ensure government compliance with the planned establishment of Bitcoin reserves through legal enforcement.

This change aims to avoid delay and market uncertainty, ensuring the rapid realization of strategic Bitcoin reserves. The annual purchase of 200,000 bitcoins accounts for approximately 1.04% of the current total supply of bitcoins (about 19.2 million coins), with a total of 1 million bitcoins accounting for 5.19%. This scale matches the U.S. gold reserves (approximately 8,133.5 tons, accounting for nearly a quarter of global gold reserves), reflecting the strategic intent of positioning 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 phased purchases or off-exchange transactions).

Enhanced holding requirements: removal of debt exception

The 2024 version allows Bitcoin to be sold within a minimum holding period of 20 years to repay federal debt instruments, providing the government with flexibility, but also weakening the commitment to holding Bitcoin as a strategic asset in the long term. The 2025 version removes this provision and explicitly states that Bitcoin may not be sold, exchanged, auctioned, or disposed of for any purpose within 20 years.

This change reinforces Bitcoin's positioning as a "long-term store of value," consistent with the concept of "digital gold." The 20-year holding period aims to ensure the long-term appreciation potential of Bitcoin and provide stable strategic assets for the U.S. economy. However, this strict requirement may be controversial as it limits the government's flexibility to use Bitcoin in economic crises, such as for repaying national debts or addressing emergencies.

Coordination with the Exchange Stabilization Fund (ESF) has been added.

The 2025 edition adds coordination provisions with the Exchange Stabilization Fund (ESF), allowing the use of this reserve fund (approximately $39 billion) to support Bitcoin purchases. The ESF is an emergency reserve fund used by the Treasury to stabilize exchange rates and financial markets, typically used to intervene in the foreign exchange market or support international financial stability.

This modification expands the channels for funding sources and provides additional financial support for Bitcoin purchases. The inclusion of ESF indicates that the government plans to consider Bitcoin as part of the national financial strategy, potentially purchasing Bitcoin directly through executive orders or market operations. However, this move may spark controversy over the purpose of ESF, as its original intention was not for cryptocurrency investments but to address financial crises.

Adjustment of the purpose of revaluing gold income

The "revaluation" of the Federal Reserve's gold reserves refers to the reassessment of the Treasury's holdings of gold reserves (about 8,133.5 tons) from the statutory price ($42.2222 per ounce) to the current market price (approximately $2,900 per ounce in March 2025). This revaluation will result in an unrealized gain of approximately $747.3 billion (market value of approximately $758.3 billion minus book value of $110 billion).

The 2024 edition will include these profits in the general fund, while the 2025 edition explicitly specifies their use for the Bitcoin purchase plan. This adjustment reflects strong support for the Bitcoin strategic reserve and also provides a strong financial foundation for the bill's "budget neutrality." However, fluctuations in the price of gold (possibly rising to $3,500 per ounce or falling to $2,500 per ounce) may affect the final available amount and require further legislative refinement.

Strictly speaking, the bill does not require the direct "sale" of the gold reserves. The gold will still remain in the Treasury's reserves as a national asset. Revaluation is just an accounting adjustment that re-enters the market value of gold into the Treasury's balance sheet, and the appreciation part will be used to purchase Bitcoin.

However, from an economic perspective, this process is similar to purchasing Bitcoin with the "value of indirectly selling gold," as the appreciation of gold on the books is converted into cash or equivalents for trading in the Bitcoin market. These modifications collectively reflect a comprehensive upgrade in enforcement, strategic positioning, and financial security in the 2025 version of the Bitcoin Act, laying a more solid foundation for establishing strategic Bitcoin reserves.

Where will the 200,000 buying orders per year push Bitcoin?

If the "Bitcoin Act" is passed, the U.S. government's annual purchase of 200,000 bitcoins will have a profound impact on the price of Bitcoin.

As of March 2025, the circulating supply of Bitcoin is approximately 19.2 million, with a price of $83,000 per coin, and a total market value of $1.6 trillion. The daily trading volume of Bitcoin is usually between $20 billion and $50 billion (assuming $35 billion), and the annual purchase amount of 200,000 coins of Bitcoin is $16.6 billion, totaling $83 billion over five years. This accounts for 1.04% of the total market value (per year) or 5.19% (five years), which is relatively small, but continuous purchases may trigger market chain reactions.

Supply and demand dynamics analysis

Increased demand: 200,000 bitcoins per year account for approximately 1.04% of the total supply. If market liquidity is limited, this demand may quickly drive up prices. Bitcoin's supply growth is limited by the halving mechanism that occurs every four years (currently producing 6.25 BTC every 10 minutes), and most bitcoins are held long-term by HODLers, resulting in low liquidity.

Market response: Historical data (such as Japan's legalization of Bitcoin in 2017 or institutional adoption in 2020-2021) shows that policy favorable and large-scale buying may lead to a short-term price increase of 10%-50%, or even more. The mandatory purchases in the 2025 version of the bill and the synergistic effect of Trump's executive order may trigger a 'fear of missing out' (FOMO) effect, further driving up prices.

Price Forecast

Based on the supply and demand model and market sentiment, we can speculate on 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%, reaching $91,300-$110,000 per coin. With about $45.48 million in buy orders per day ($16.6 billion per year), it accounts for 0.013% of the daily trading volume. However, if there is concentrated buying, it could push up the price to over $100,000 by targeting the higher price levels with shallow order book depth (above $80,000).

Mid-term (1-2 years): With the continued government purchases and enhanced market confidence, the price may reach $120,000-150,000 per coin (an increase of 45%-81%). If institutions and retail investors follow suit, the price may further soar.

Long-term (5 years): Within five years, purchasing 1 million bitcoins (5.19% of the supply), combined with supply reduction and macroeconomic factors (such as inflation or USD depreciation), the price may surpass $200,000 per coin, especially during a bull market cycle.

Final Forecast

After the "Bitcoin Act" is passed, the U.S. government's annual demand for 200,000 bitcoins is likely to drive the price of bitcoin to new highs, with a short-term potential to exceed $110,000 per coin, a medium-term target of $150,000 per coin, and a long-term possibility of surpassing $200,000 per coin. However, the actual price will heavily depend on market reactions, purchasing strategies, and external economic conditions. This move may not only reshape bitcoin's global status but also have a profound impact on the U.S.' leadership in the field of digital currencies.