On May 21, 2026, U.S. Representatives Nick Begich and Jared Golden officially introduced the “American Reserve Modernization Act of 2026” (ARMA). Sixteen lawmakers across both parties jointly signed in support.
Unlike the BITCOIN Act that previously drew widespread attention, ARMA no longer requires the U.S. government to buy 1 million BTC. Instead, it folds the bitcoins the government already holds—and those it gains in the future through forfeiture—into a strategic reserve, and sets a mandatory lockup period of at least 20 years.
This adjustment marks a structural shift in U.S. bitcoin reserve legislation from an “aggressive quantity pursuit” to a “long-term institutional lock.” Below is a breakdown of the key provisions of the ARMA bill:
Below are the organized bullet points:
Why the U.S. is abandoning the million-BTC purchase target
Dropping the 1 million BTC purchase target is not a policy rollback, but a pragmatic legislative strategy choice.
From a fiscal feasibility standpoint, even if operations are carried out via a “budget-neutral” mechanism, purchasing 1 million BTC still faces enormous obstacles. U.S. government debt has already exceeded $39 trillion, and any buy-in plan requiring public resources is unlikely to gain cross-party support.
From the standpoint of market disruption, a large-scale signal of proactive buying itself acts as a volatility amplifier for prices. Once the bill removes the explicit purchase target, the political controversy focus shifts dramatically, and the resistance to passing the legislation falls significantly.
A deeper consideration is that the U.S. government already holds about 328,000 bitcoins through forfeiture channels—valued at roughly $26 billion based on current prices. Against the backdrop of the executive order freezing sales, “stop selling and lock existing holdings” is the legislative path with the least resistance, and institutionalizing progress along that path is itself a strategic outcome.
The game logic behind the 20-year lockup design
The 20-year lockup period is ARMA’s most core institutional design. At its essence, it overlays two lines of defense.
The first line is stability across administrative cycles. ARMA aims to codify Trump’s March 2025 executive order into permanent law so it is no longer affected by subsequent government changes. Begich has clearly stated that the core goal of the lockup is to isolate crypto assets from “congressional volatility or repeated changes by future administrations.”
The second line is institutionalized constraints on the disposal channel. The bill states that during the lockup period, reserve assets may not be disposed of in any way. Even after the 20-year lockup ends, the Secretary of the Treasury may only recommend selling up to 10% of the reserves within any arbitrary two-year period; actual execution remains constrained by congressional oversight.
How the “digital gold” positioning for bitcoin reserves is strengthened
Through three institutional arrangements, the ARMA bill systemically pushes bitcoin toward a “digital gold” positioning.
First, a zero-cost path to inventorying holdings. The bill no longer relies on proactive buying; instead, it expands the reserve through the aggregation of forfeited assets. Each year, by using forfeiture procedures by the DEA, FBI, marshals, and other agencies, the U.S. can continuously inject bitcoins into the reserve—without congressional appropriations and without involving fiscal budget. Arkham Intelligence estimates the annual forfeiture amount at about 15,000 to 30,000 BTC.
Second, a deep linkage between legislation and executive orders. ARMA is an “institutionalization” extension of the March 2025 Trump executive order. U.S. Treasury Secretary Scott Bessent has already made clear in January: “First, you must stop selling. We’ve already done that.”
Third, directly aligning with the institutional model of gold reserves. ARMA draws a direct analogy between bitcoin reserves and gold reserves. The core logic is: gold is the key asset in the U.S. national reserve system, so bitcoin’s institutional status should be extended accordingly. It further proposes the alignment goal— the U.S. should hold about 5% of the world’s bitcoins, broadly comparable to the current share of gold in global gold markets held by the U.S. gold reserves.
Long-term lockup: two-way effects on market liquidity
From a supply contraction perspective, locking about 328,000 bitcoins for 20 years means this portion of supply will permanently exit the trading market flow, no longer entering exchanges for trading or being used for collateral transfers. This mechanism effectively directly reduces the effective circulating supply by about 328,000 BTC. When this lockup is layered with Strategy (formerly MicroStrategy)’s holdings of about 843,000 BTC and U.S. spot ETF holdings of about 1.26 million BTC, more than 2.4 million bitcoins have already been absorbed by “strong hands”—the structure of long-term holders continues to strengthen.
From a liquidity perspective, there is still a tug-of-war in how the market interprets it. The supply of bitcoin held by long-term holders has risen to about 15.26 million BTC, and about 316,000 BTC was absorbed over the past 30 days. Some market participants believe that long-term lockups reduce the amount of bitcoins available for trading, which may lower the magnitude of future large price swings.
Overall, ARMA’s impact on market liquidity is asymmetric in both time and intensity—limited disruption to currently active liquidity in the short term, but in the medium to long term it will reshape the supply structure and create a persistent “natural long” effect.
From BITCOIN Act to ARMA: the evolution of the U.S. bitcoin legislative path
From Cynthia Lummis’ first proposal of the BITCOIN Act in 2024, to Trump signing an executive order in March 2025, and then to ARMA’s formal introduction in May 2026, U.S. bitcoin reserve legislation has gone through four phases:
- 2024: The initial BITCOIN Act proposes buying 1 million BTC within five years, holding it for at least 20 years, and begins legislative exploration.
- March 2025: Trump signs an executive order to establish a strategic bitcoin reserve and stops the sale of bitcoins held by the government.
- March—April 2026: Legislative focus shifts from “purchasing” to “legalizing existing holdings.” The CLARITY Act passes the Senate Banking Committee. ARMA pushes “budget-neutral” research and locks in existing holdings.
- May 2026: ARMA is formally introduced, removes the 1 million BTC purchase target, and locks for 20 years.
The executive order signed by Trump in March 2025 has already completed the direction shift first: the reserve uses only bitcoins obtained through asset forfeiture, no longer adding any new burden to taxpayers. At that time, the U.S. government held about 200,000 BTC. By May 2026, that portion of holdings has grown to about 328,000 BTC. ARMA is precisely the institutional landing spot that formalizes this adjustment into law.
How quarterly reserve attestations and audit mechanisms build a credible framework
During the legislative push, ARMA establishes a three-layer credible framework in terms of transparency:
The first layer is the reserve attestation system. Federal agencies must fully report the digital assets they hold within 60 days after the bill takes effect.
The second layer is third-party audits. The bill requires an independent third-party audit of the reserves to ensure the authenticity and security of the holdings.
The third layer is congressional oversight. Quarterly public disclosures combined with Congress’s ongoing oversight power form a multi-layer checks-and-balances mechanism.
The layering of these three systems ensures that the bitcoin reserve is no longer a black box. Improved transparency is itself a prerequisite for broader social legitimacy of the bitcoin reserves.
The next checkpoint for legislative bargaining: resistance and variables within Congress
Whether ARMA can be smoothly converted into law still depends on overcoming multiple obstacles. Resistance mainly comes from two areas: first, obstacles to advancing it within Congress. Some lawmakers hold explicit doubts about a bitcoin strategic reserve, arguing it lacks the economic input value that traditional strategic assets should have. Second, the legislative window is narrowing. The 2026 midterm elections are approaching, and the congressional agenda will be further compressed.
Summary
The core adjustment in the ARMA bill—abandoning the 1 million BTC purchase target and setting a mandatory 20-year lockup period—is essentially a structural convergence in legislative strategy. It gives up the pursuit of “quantity” in terms of purchase power and instead chooses a path with less resistance: locking the U.S. government’s existing bitcoin holdings worth about $26 billion, continuously adding via forfeited assets, and permanently institutionalizing the reserve framework by leveraging bipartisan political momentum.
The commercial logic of this path is very clear. Rather than trying to achieve the 1 million BTC target by breaking through fiscal and political resistance in a market contest, it advances meaningful progress within a higher-certainty, lower-consensus-cost framework. The strategic value of the 20-year lockup period lies not only in the government’s “not selling,” but also in the institutional signal it releases— the structure of long-term holders is further consolidated, and the “strong-hand” force on the supply side keeps accumulating. For the market, the long-term impact of ARMA shows up more in the expectation-anchor layer: once one of the largest potential sell-side sources is institutionalized as frozen, the market’s pricing logic and narrative structure will both undergo profound adjustment.
Whether the bill can ultimately pass in Congress depends on the outcome of negotiations among stakeholders within the legislative window. But regardless of the result, ARMA has already set a key institutional reference point for U.S. bitcoin reserve legislation—from “how much to buy” to “how long to lock.” The narrative main axis has already shifted.
FAQ
Q1: What is the most core difference between the ARMA bill and the BITCOIN Act?
The ARMA bill removes the BITCOIN Act’s goal of buying 1 million bitcoins within five years. It no longer requires proactive government buying. Instead, it expands reserves by aggregating forfeited assets. At the same time, it retains and strengthens the mandatory 20-year lockup period.
Q2: Does the 20-year lockup mean the government can’t sell bitcoins at all?
During the lockup period, the government may not sell, exchange, auction, or pledge bitcoins in the reserve in any manner. After the lockup period ends, the Secretary of the Treasury may recommend selling up to 10% of the reserves within any given two-year period, but must follow a congressional oversight mechanism.
Q3: How many bitcoins does the U.S. government currently actually hold?
As of February 2026, the U.S. government holds about 328,000 bitcoins, mainly obtained through criminal and civil forfeitures, worth about $26 billion.
Q4: What impact does the ARMA bill have on market liquidity?
Locking 328,000 bitcoins for 20 years means this supply will exit circulation completely. When combined with holdings from long-term holders such as Strategy and spot ETF holdings, the overall long-term holder structure continues to strengthen, producing a sustained impact on the market supply landscape.
Q5: How likely is ARMA to pass?
ARMA is currently at the House proposal stage and must go through committee review and a full-vote in the chamber. Its “budget-neutral” framework design and bipartisan-sponsorship backdrop reduce legislative resistance, but with midterm elections approaching, the congressional timetable is tightening. Whether it can ultimately pass depends on the outcomes of negotiations among stakeholders within the legislative window.
