Ark Invest CEO Cathie Wood thinks President Donald Trump will start buying Bitcoin (BTC) for the strategic reserve before the 2026 midterms, and she's got a whole theory about why the timing makes sense politically.
Three Reasons Trump Might Pull The Trigger
In an interview published Thursday, Wood laid out three motivations that could push Trump toward making actual purchases for the strategic reserve.
First, there's the lame duck problem. Presidents who lose midterms typically watch their legislative power evaporate for their final two years. Nobody wants that, especially not Trump.
Second, Trump's family has significant investments in Bitcoin and crypto assets. Several digital asset investment vehicles performed poorly in 2025, which creates some interesting pressure to support the market through government action.
Third, and perhaps most important, the crypto community played a decisive role in Trump's 2024 election victory. Delivering on promises matters when you need those voters again. That means building a strategic Bitcoin reserve and passing the de minimis tax exemption that allows small Bitcoin transactions without capital gains taxes.
Wood expects Trump to work with his crypto and AI czar to push both initiatives forward. The original plan called for owning 1 million Bitcoin, but right now the reserve only holds seized assets from criminal cases.
The Budget Neutrality Problem
Here's the constraint: White House AI and crypto czar David Sacks has said Bitcoin purchases must be budget neutral, meaning they can't increase the deficit.
Wood thinks the administration will find workarounds through stronger-than-expected economic growth. The One Big Beautiful Bill dropped the effective U.S. corporate tax rate to 10%, the lowest in the developed world. The bill also includes 100% first-year depreciation for manufacturing facilities that break ground by the end of 2028.
These tax changes should drive significant GDP growth, which increases tax revenue and creates fiscal space for Bitcoin purchases without technically violating budget neutrality. Wood expects the administration to use this flexibility to justify strategic reserve buying.
A Global Domino Effect
If the U.S. government starts buying, Wood said other countries would be forced to reconsider their reserve strategies. This could trigger the sovereign adoption wave Ark has anticipated for years. The move would signal that nations no longer need to remain entirely dependent on the dollar.
This shift could create turbulence for emerging market currencies as governments reallocate reserves. She believes the global monetary system will ultimately consolidate around two currencies: the dollar, supported by stablecoins, and Bitcoin.
Still Bullish Despite The Volatility
The key question is whether the four-year cycle still applies and if $80,000 was the low. Wood said getting through this cycle with a 30%+ drop instead of 50-70% would be a victory and consistent with Bitcoin's declining volatility over time.
Lower volatility makes Bitcoin more attractive to institutional allocators and government treasuries.
Wood also noted that stablecoins have taken over some payment use cases Ark originally expected Bitcoin to fill, particularly in emerging markets. However, gold's strong 2025 performance reinforces Bitcoin's role as digital gold and more than compensates for the stablecoin competition.