Crypto Czar's Clue: David Sacks Hints at Expanded US Bitcoin Reserve

After printing all-time highs earlier this year and surpassing the landmark $100k level, Bitcoin has oscillated for months and is retreating. Despite the short-term weakness, Bitcoin provides investors with five reasons to be bullish into year-end, including:

Crypto Czar David Sacks Hints at Potential Expansion of US Strategic Bitcoin Reserve

Earlier this year, President Donald Trump and his hand-selected ‘Crypto Czar’ David Sacks lit up the Bitcoin lexicon by announcing the ‘Strategic Bitcoin Reserve and US Digital Asset Stockpile.’ Through the March 6^th Trump administration executive order (EO), the US government will hold onto any Bitcoin seized through nefarious activities (The US currently holds ~200k Bitcoin).

While the EO means that the US government will not flood the market with a massive supply of Bitcoin, it will not add to Bitcoin demand. However, recent comments from David Sacks at the world’s largest Bitcoin conference suggest that that could change in the future. Sacks indicated that the US government may expand the Bitcoin Strategic reserve by acquiring more Bitcoin through ‘budget neutral’ strategies.

Bitcoin Enters High Probability Reward-to-Risk Zone

Using the iShares Bitcoin ETF (IBIT) as a Bitcoin proxy, Bitcoin is retreating to its rising 50-day moving average for the first time since making a low at the beginning of Q2. Typically, the first tag of the 50-day moving average after a price advance establishes a high probability support zone.

GENIUS Act May Spur More Bitcoin Demand

Earlier this month, the GENIUS (Guiding and Establishing National Innovation for US Stablecoins Act) passed the US Senate in a bipartisan fashion and with a wide margin of 68-30. Though the act is primarily focused on providing regulatory to stablecoins (digital assets pegged to fiat and other assets) like Circle’s (CRCL) USDC, GENIUS will profoundly impact the digital asset market as a whole, including Bitcoin. The GENIUS Act will lead to further Bitcoin adoption for three reasons, including:

1.       Regulatory Credibility: Over the years, a key struggle that has stymied Bitcoin demand is the lack of regulatory clarity. Industry leaders like Coinbase (COIN) CEO Brian Armstrong have complained for years about the lack of comprehensive regulations in the digital asset space. By regulating stablecoins, the government lends credibility to digital assets in general, including Bitcoin.

2.       A Broader Crypto Ecosystem: Increased trust and regulatory oversight will lead toa sturdier andwidely accepted digital asset ecosystem.

3.       The Stablecoin Stepping Stone: With more institutions and digital asset users leveraging stablecoins, the GENIUS Act will act as a new entry point for other crypto assets like Bitcoin for once non-crypto users.

Bitcoin's Insatiable Institutional Demand

Between the growing popularity of Bitcoin ETFs and companies like Strategy (MSTR) and Block (SQ), which continue to add Bitcoin to their balance sheets by the millions, institutional Bitcoin demand will likely remain robust into 2026.

Risk-On Assets Like Bitcoin Are In Vogue

Despite Fed Chair Jerome Powell’s recent hawkish monetary policy stance, investors are pricing in a 50 bps interest rate cut (according to the betting website Polymarket). Historically, lower rates (more liquidity) have been bullish for Bitcoin.

Bottom Line

Despite Bitcoin’s recent sloppy price action and a retreat from all-time highs, a confluence of factors, including a potential expansion of the US Strategic Bitcoin Reserve, paint a decidedly bullish picture for Bitcoin into 2026

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This article originally published on Zacks Investment Research (zacks.com).

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