Senator Cynthia Lummis has introduced a novel financial strategy to expand the U.S. Strategic Bitcoin Reserve (SBR) by revaluing the nation’s gold holdings rather than purchasing additional Bitcoin directly. The proposed BITCOIN Act seeks to use the current market appreciation of gold—without incurring new debt—to fund the purchase of up to 1,000,000 BTC over five years, with a mandatory 20-year holding period. This approach is positioned as a budget-neutral method of increasing the SBR under President Trump’s executive order establishing the reserve in March 2025 [1].
Lummis’ proposal aligns with Treasury Secretary Scott Bessent’s public stance that the U.S. government will not engage in direct Bitcoin purchases. Instead, Bessent has emphasized the need to explore alternative funding mechanisms that align with fiscal responsibility, stating that a “budget-neutral path to building SBR is the way” [2]. The BITCOIN Act is designed to leverage gold revaluation as a capital source, effectively transferring the appreciation of gold reserves to fund the acquisition of Bitcoin. This method circumvents the need for new federal spending while still allowing for a controlled expansion of the SBR.
The proposal has been interpreted as a strategic move to address the U.S. national debt, currently hovering near $37 trillion, by reallocating existing asset values rather than injecting new liabilities into the economy. By revaluing gold to its current market price and using the gains to fund Bitcoin purchases, the initiative avoids adding to the national debt while still building a long-term digital asset reserve [3].
Though the idea has sparked discussions within policy and financial circles, the market has thus far shown limited volatility in response to the proposal. The broader implications remain to be seen, particularly how the revaluation of gold might influence both the gold and Bitcoin markets. Lummis has stated that the BITCOIN Act represents a forward-looking approach to sovereign asset management, integrating traditional and digital assets in a way that could set a precedent for future fiscal strategies [4].
The BITCOIN Act is not without controversy. Some critics argue that using gold revaluation as a proxy for Bitcoin expansion does not represent a direct investment in the asset and could be seen as a symbolic rather than substantive increase in holdings. However, proponents highlight the practicality of the approach within the current fiscal environment and see it as a viable solution given the administration’s reluctance to engage in direct cryptocurrency purchases [5].
The final version of the BITCOIN Act is expected to include detailed mechanisms for implementing the gold revaluation process and managing the subsequent Bitcoin acquisitions. As the proposal moves through the legislative process, its passage will depend on how effectively it is framed as both a fiscally responsible and strategically sound initiative [5].
Source:
[1] title: Senator Lummis Targets Gold Value Boost to Fuel US …
url: https://coincentral.com/senator-lummis-targets-gold-value-boost-to-fuel-us-bitcoin-dominance/
[2] title: Treasury Secretary Clarifies Trump Bitcoin Reserve Plans
url: https://bitbo.io/news/trump-bitcoin-reserve-clarification/
[3] title: Senator Lummis Proposes BITCOIN Act to Create Strategic …
url: https://www.ainvest.com/news/bitcoin-news-today-senator-lummis-proposes-bitcoin-act-create-strategic-reserve-2508/
[4] title: US Rules Out Direct Bitcoin Purchases for Strategic …
url: https://icoholder.com/en/news/us-rules-out-direct-bitcoin-purchases-for-strategic-reserve-sparking-debate
[5] title: Senator Lummis Backs BITCOIN Act for Strategic Reserve …
url: https://www.ainvest.com/news/bitcoin-news-today-senator-lummis-backs-bitcoin-act-strategic-reserve-framework-2508/
