Cathie Wood says US gov't may 'start buying' to stock national bitcoin reserve

ARK Invest founder Cathie Wood said that crypto remains a politically salient issue for President Trump as he faces midterm elections that could weaken his presidency, and those concerns bode well for the U.S. Bitcoin Reserve. 

Wood argued in a recent episode of the "Bitcoin Brainstorm" podcast that the federal government might soon start purchasing bitcoins to add to the national strategic reserve, which came into existence by executive fiat less than a week into Trump's second term. 

"It seems as though there has been reticence about actually buying bitcoin for the strategy reserve. So far, it's confiscated [bitcoins]," Wood said, referring to the assets seized by government forfeiture that Trump pledged not to sell. 

"The original intent was to own 1 million bitcoins, so I actually think they will start buying," she added.     

According to Wood, there are several reasons why Trump is likely to continue in his support of crypto, including his family’s growing stake in the industry’s success. She also argued the "crypto community" was "part of the reason he won the presidency."

"The most important one is that he doesn’t want to be a lame duck," Wood said. "He wants to have another one or two productive years, and I think he sees crypto as a path to the future."

Crypto influence

Indeed, crypto industry participants coalesced into a notable political force during the last U.S. election cycle. Outside of the political action committees like Stand With Crypto that donated generously to campaigns up and down the ballot, several high-profile executives endorsed Trump and donated to his reelection personally, including Wood.

Some figures have made vocal recommendations to the administration, and the White House has hosted crypto-related events. Coinbase, Tether, and Ripple are among the firms helping to fund the new White House ballroom. 

Crypto is not an insignificant area of focus for the Trump administration. The president signed two executive orders to establish crypto stockpiles and form a working group chaired by the Special Advisor for AI and Crypto, David Sacks, and pushed for industry legislation elsewhere, like the GENIUS Act, formalizing stablecoin rules. 

Sacks' working group published a lengthy report in July with several policy recommendations, including granting the Commodity Futures Trading Commission authority to "regulate spot markets in non-security digital assets." It also said both the bitcoin reserve and crypto stockpile would be administered by the Treasury Department and only "capitalized by forfeited digital assets."

The bitcoin reserve order was essentially a holding mechanism to treat already seized BTC as a strategic national asset, similar to gold held at Fort Knox, though it also tasked the Treasury and Commerce Departments with exploring budget-neutral strategies for adding more BTC. No purchases have been made. 

In addition to the strategic importance of stocking the national bitcoin reserve, Wood said Trump's administration will "make sure" it gets a de minimis tax exemption ruling, which would eliminate capital gains taxes on small cryptocurrency transactions.

Several U.S. states, including Florida and Texas, are working to pass similar crypto stockpile legislation.