Cathie Wood: US Government May 'Allocate' to Bitcoin, Bolster National Strategic Reserve

ARK Invest founder Cathie Wood said the U.S. government may begin directly purchasing Bitcoin to bolster its national strategic reserve, moving beyond using only law enforcement-seized coins. Wood made the comments in an appearance on the 'Bitcoin Brainstorm' podcast on January 9 according to reports. She emphasized that the Trump administration initially set a target of acquiring 1 million Bitcoin, suggesting market purchases will likely follow.

The idea of a U.S. government Bitcoin reserve was established through an executive order early in President Trump’s second term. So far, the reserve has only included confiscated Bitcoin, but Wood believes the administration will begin buying directly to meet its goals as reported. Trump’s continued focus on crypto-related issues is also being driven by political considerations, including midterm elections and the growing influence of the crypto community according to analysis.

At the state level, Florida lawmakers have introduced a new bill to establish a state-managed Bitcoin reserve. Senate Bill 1038 would create a Florida Strategic Cryptocurrency Reserve overseen by the state’s chief financial officer as noted. The bill limits eligible assets to cryptocurrencies with a minimum market capitalization of $500 billion, currently only applicable to Bitcoin according to reports.

Why Did This Happen?

The renewed interest in Bitcoin reserves stems from a combination of political and economic factors. Cathie Wood highlighted that Trump and his allies have a vested interest in the crypto space, both financially and politically as stated. At the same time, states like Florida are seeking to create their own reserves to hedge against economic volatility and enhance financial resilience according to analysis.

This is part of a broader trend, with Texas and New Hampshire already having enacted similar legislation. Other states, including Arizona, are also exploring options for managing digital assets as reported. The legislative momentum suggests a growing consensus among policymakers that Bitcoin could play a role in diversifying state treasuries according to analysis.

How Did Markets Respond?

The crypto market reacted with a brief sell-off following news of new Trump administration policies. A proposal to impose 500% tariffs on countries buying Russian oil triggered a 3%–8% drop in Bitcoin and major altcoins according to reports. The decline mirrored a similar market reaction in October 2025 when Trump previously raised the possibility of imposing heavy tariffs on Chinese imports as noted.

Despite the short-term volatility, the long-term outlook remains bullish. The total crypto market capitalization has held steady at around $3.19 trillion, and Bitcoin remains within a consolidation range of $85,000–$102,000 according to analysis. Analysts argue that macroeconomic factors, such as ETF inflows and falling volatility, support a long-term upward trajectory as reported.

What Are Analysts Watching Next?

Market participants are closely watching the potential passage of the CLARITY Act, which could have a significant impact on institutional adoption. The bill, introduced in the Senate, aims to classify Bitcoin as a 'digital commodity' under the CFTC framework, removing barriers to institutional participation according to analysis.

At the same time, the U.S. Strategic Bitcoin Reserve under Trump’s administration is expected to continue expanding, potentially adding more than 1 million Bitcoin to its holdings as reported. This could create a new source of institutional demand that dwarfs current supply levels according to analysis.

Corporate treasuries are also playing a role in Bitcoin’s increasing institutionalization. Michael Saylor’s Strategy firm, for instance, has increased its Bitcoin holdings to 673,783 coins, valued at roughly $63 billion according to reports. The company continues to raise capital through equity sales to fund its purchases as noted.

As the year progresses, analysts will be watching for key milestones such as the March 2026 mining of the 20 millionth Bitcoin, which marks a symbolic turning point in the digital asset’s transition from a growth asset to a scarce commodity according to analysis. The combination of legislative, institutional, and macroeconomic factors suggests that 2026 could be a pivotal year for Bitcoin’s adoption and valuation.