Cathie Wood, the CEO of Ark Invest, recently articulated her perspective that President Donald Trump has substantial incentives to begin acquiring Bitcoin on behalf of the U.S. government for strategic reserve purposes prior to the 2026 midterm elections. According to Wood, such an initiative would aim to bolster Trump's political standing and maintain backing from crypto-supporting voter segments.
Wood outlined her analysis in an interview published on Thursday where she identified three primary drivers that could prompt Trump to pursue Bitcoin accumulation for the strategic reserve.
Preventing Lame Duck Status
Wood emphasized that Trump would be motivated to avoid becoming a lame duck president during his final two years in office. Historically, presidents who suffer losses at midterm elections often experience diminished legislative influence, hindering their ability to advance key policy agendas. By taking proactive financial steps such as building a Bitcoin reserve, Trump may seek to sustain momentum and influence going into the latter part of his term.
Family Investments in Cryptocurrency
An additional factor Wood highlighted is the significant exposure Trump's family reportedly has in Bitcoin and other crypto assets. The performance of various digital asset investment vehicles declined in 2025, potentially increasing pressure within governmental circles to support the cryptocurrency market through official actions. Establishing a strategic Bitcoin reserve could be a way to address these pressures while signaling confidence in the industry.
Securing Support from the Crypto Community
Wood remarked on the importance of the crypto voter base, which she credited with playing a consequential role in Trump's 2024 election success. Continuation of that political alliance, according to Wood, depends on fulfilling commitments made to the crypto sector. These promises include not only the creation of a government-held Bitcoin reserve but also legislative efforts such as passing the de minimis tax exemption, which permits small Bitcoin transactions without triggering capital gains taxation.
Wood further expects Trump to collaborate closely with the administration’s designated crypto and artificial intelligence czar. Together, they would be poised to advance these key initiatives, transforming preliminary objectives into legislative and fiscal actions. While initial plans reportedly targeted owning an aggregate of one million Bitcoins, the present government holdings are limited to seized Bitcoin assets linked to criminal cases.
Budget Neutrality and Economic Growth Considerations
Wood noted a significant constraint identified by White House AI and crypto czar David Sacks: any Bitcoin purchases must be budget neutral and not contribute to increasing the federal deficit. Wood believes, however, that developments on the economic growth front might provide a pathway to overcome this limitation.
She pointed out that the recently enacted "One Big Beautiful Bill" reduced the effective U.S. corporate tax rate to 10 percent, positioning it as the lowest among developed nations. Further, the bill includes provisions for 100 percent first-year depreciation on manufacturing facilities commencing construction before the end of 2028. These tax reforms are anticipated to stimulate robust economic expansion, leading to higher tax revenues.
Increased revenues could generate additional fiscal space, thereby allowing the government to fund strategic Bitcoin acquisitions without technically breaching the requirement for budget neutrality. Wood sees this as a tactical opportunity for the administration to justify and operationalize reserve purchases.
Potential International Ramifications
Wood also speculated on the broader international impact of the U.S. government's engagement in Bitcoin buying. She indicated that such moves might compel other countries to reassess their reserve management strategies, possibly triggering a wave of sovereign Bitcoin adoption that Ark Invest has anticipated for several years.
The adoption of Bitcoin by a major government like the U.S. would signal a shift away from complete reliance on the U.S. dollar, introducing a dual-currency reserve paradigm globally. Wood suggested this could cause disruptions to emerging market currencies as governments recalibrate their reserve allocations.
She envisions the eventual consolidation of the global monetary system around two dominant currencies: the U.S. dollar, augmented by the use of stablecoins, and Bitcoin.
Market Volatility and Long-Term Outlook
Addressing recent market fluctuations, Wood reflected on Bitcoin’s four-year cycle, questioning whether the bottom price established near $80,000 would hold. She remarked that enduring the latest cycle with a price decline around 30 percent, as opposed to declines ranging from 50 to 70 percent seen previously, would represent progress and align with the observed gradual reduction in Bitcoin's price volatility over time.
This reduced volatility, according to Wood, enhances Bitcoin's appeal for institutional investors and government financial management, making it a more feasible asset for strategic reserves.
Wood also acknowledged that stablecoins have increasingly occupied some of the transactional roles in payments, especially in emerging markets, that Ark originally expected Bitcoin to fulfill. Nonetheless, the strong performance of gold in 2025 underlines Bitcoin's positioning as a form of digital gold, a role that remains significant despite stablecoin competition.
Summary of Key Points
- President Trump may look to build a Bitcoin reserve prior to 2026 midterms to maintain political influence and voter support.
- Three main motivations include avoiding lame duck status, supporting family crypto investments, and fulfilling promises to the crypto community.
- Budget neutrality constraints may be navigated through anticipated economic growth and tax reforms increasing federal revenues.
- U.S. government Bitcoin purchasing could instigate a broader global shift in reserve currency strategies and monetary systems.
Risks or Uncertainties Highlighted
- Uncertainty remains around whether the four-year Bitcoin price cycle and recent $80,000 low will hold in the current market context.
- Constitutional and fiscal constraints on budget neutrality could limit the scale or timing of Bitcoin reserve acquisitions.
- The impact of stablecoins supplanting Bitcoin in some payment use cases may alter Bitcoin’s prospective utility in emerging markets.
- Global monetary dynamics may experience volatility as countries adjust reserves in response to U.S. governmental Bitcoin purchases.