ARK Invest founder Cathie Wood said the federal government might begin purchasing Bitcoin to expand the national strategic reserve beyond confiscated assets, driven by President Donald Trump's political calculations ahead of midterm elections that could determine his administration's remaining legislative effectiveness.
What Happened: Bitcoin Reserve Expansion
Wood argued that the administration faces pressure to move beyond its current approach of holding only seized cryptocurrencies.
"It seems as though there has been reticence about actually buying Bitcoin for the strategy reserve. So far, it's confiscated [bitcoins]," Wood said.
The strategic Bitcoin reserve came into existence through executive order less than a week into Trump's second term.
The original intent called for accumulating 1 million bitcoins, Wood noted.
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Why It Matters: Political Stakes
Trump's continued support for cryptocurrency stems from multiple factors, including his family's business interests in the sector and the role crypto community members played in his election victory, according to Wood.
"The most important one is that he doesn't want to be a lame duck," she said. "He wants to have another one or two productive years, and I think he sees crypto as a path to the future."
The administration has taken concrete steps to establish crypto policy frameworks.
Trump signed two executive orders establishing crypto stockpiles and forming a working group chaired by Special Advisor for AI and Crypto David Sacks, who published a lengthy report in July recommending the Commodity Futures Trading Commission gain authority to "regulate spot markets in non-security digital assets."
The report specified that both the Bitcoin reserve and crypto stockpile would be "capitalized by forfeited digital assets" and administered by the Treasury Department.
Coinbase, Tether, and Ripple are among firms funding the new White House ballroom, while states including Florida and Texas are advancing similar crypto stockpile legislation.
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