Proposal calls for permanent reserve
The American Reserve Modernization Act (ARMA Act) proposes a US strategic Bitcoin reserve, as investors watch whether the legislation provides a long-term uptick for Bitcoin demand and creates a role for the cryptocurrency as a government-held asset.
Thanalop Preedamanoch, head of investment and fund manager at Merkle Capital, said major Bitcoin rallies have historically been driven by new sources of demand. Retail investors played a key role in the 2021 bull market, while institutional demand accelerated in 2024 following the introduction of spot Bitcoin exchange-traded funds.
The next major source of demand could come from governments, with the US potentially setting the direction for other countries.
The ARMA Act seeks to switch the strategic Bitcoin reserve from an executive policy into a permanent legal framework, which could reduce the risk of future administrations reversing the policy and selling government-held Bitcoin, he said.
However, before the bill can gain momentum, investors are monitoring the US CLARITY Act, which aims to establish clearer rules for digital assets and define the respective responsibilities of the Securities and Exchange Commission and Commodity Futures Trading Commission.
The legislation would not directly create new Bitcoin demand, but clearer regulation could reduce uncertainty across the crypto market and improve the prospects for wider digital asset policies, said Mr Thanalop.
The strategic Bitcoin reserve was formally established as a policy in March 2025, when President Donald Trump signed an executive order directing the government to retain Bitcoin seized through criminal and civil forfeiture proceedings rather than sell it. The administration also explored budget-neutral ways to increase its holdings.
The policy remains vulnerable to a change in administration because an executive order can be reversed.
The ARMA Act, introduced in May 2026, would establish a strategic Bitcoin reserve in law, prevent the sale or transfer of government-held Bitcoin for at least 20 years, and require regular disclosure, including quarterly proof-of-reserve audits.
The bill would also require the Treasury and Commerce departments to study ways to increase Bitcoin holdings without raising taxes, issuing new debt or adding to the federal deficit.
ARMA does not require the government to immediately buy additional Bitcoin, so its direct impact on near-term demand could be limited, said Mr Thanalop.
“For Bitcoin investors, the potential impact is longer term. If the reserve becomes legally established, the market could place greater value on the prospect of the US retaining its Bitcoin holdings while creating a mechanism for future accumulation. This would not necessarily trigger an immediate price rally,” he said.
However, a legally protected US reserve could strengthen the argument for Bitcoin as a strategic asset and potentially encourage other governments to consider similar policies. The base case estimates the bill being delayed until 2027 as lawmakers prioritise broader crypto regulation, while political disagreements could push it into 2028, noted Merkle.
For investors, the question is no longer whether Washington will buy more Bitcoin, but whether the US is prepared to make its Bitcoin reserve a permanent part of national financial policy, said Mr Thanalop.