90 days to Digital Fort Knox starts with Congress, which set a deadline for Treasury to outline a Strategic Bitcoin Reserve and a companion custody plan that would govern federal digital asset holdings.
The reported FY2026 Financial Services and General Government bill, H.R. 5166, directs Treasury to deliver a practicability report on a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile within 90 days of enactment and to file, on the same schedule, a technical plan for custody and cybersecurity that includes treatment on the federal balance sheet, the role of the Forfeiture Fund, and a list of potential third-party custodians.
A March executive action already described the reserve concept and a federal stockpile framework, as well as the appropriations language layers in timelines, reporting requirements, and operational detail.
A forward view turns on float, flows, and the new ETF plumbing
Spot Bitcoin exchange-traded products gained permission for in-kind creations and redemptions on July 29, which lets authorized participants move bitcoin directly instead of converting to cash.
This adjustment reduces primary market frictions for creations and redemptions, and it can change the way liquidity shocks pass through to the spot market because issuers and market makers can assemble and break baskets with fewer cash conversions.
As of September 17, U.S. spot Bitcoin ETFs held about 1.318 million BTC, and net inflows over the prior 30 days were about 20,958 BTC.
Against post-halving issuance of roughly 3.125 BTC per block, about 450 BTC per day, new supply across a 90-day policy window is about 40,500 BTC.
The Strategic Bitcoin Reserve question is whether Treasury’s posture – hold, net buy, or lend – adds to the existing ETF sink, stands aside, or provides borrowing to market makers that deepen order books without adding outright sales.
Holdings reconciliation shapes the starting inventory for any reserve.
According to U.S. Marshals Service disclosures obtained via FOIA, USMS currently controls roughly 29,000 BTC that have moved through its forfeiture pipeline.
According to Arkham Intelligence, total Bitcoin under U.S. government control across agencies is nearer to about 198,000 BTC, including long-running Silk Road seizures, Bitfinex recoveries, and other cases where legal process and victim restitution timelines differ by matter.
The gap between about 29,000 and about 198,000 BTC reflects agency scope, legal finality and staging rather than a single wallet, and H.R. 5166 explicitly asks Treasury to explain transfer authorities and Forfeiture Fund impacts, which implies that interagency consolidation is a policy variable, not an accounting footnote.
The policy lever then becomes posture. A pure hold stance would consolidate finally forfeited bitcoin into a named reserve account, without new purchases or lending.
If 29,000 BTC were consolidated and locked, the tradable float would shrink by that amount immediately, while miners add about 40,500 BTC over 90 days, so net float would still grow unless ETF and other sinks outpace issuance.
If legal finality and transfer mechanics moved a larger slice, for example, 100,000 BTC, the one-time float reduction would exceed three months of new issuance, which would change order book depth and the price impact of large orders in stress.
Academic work on free float and liquidity shows that lower free float can raise market impact for a given order size, which translates in this context to larger intraday slippage when order books thin during sell-offs or squeezes.
Order book depth and slippage swing materially around stress events, which supports a narrative where float changes and ETF plumbing interact to alter realized volatility.
A net buyer posture would target predictable accumulation with budget-neutral mechanics that use finally forfeited proceeds or authorized transfers rather than new appropriations.
Schedule to absord miner issuance
A simple schedule, for example, about 137 BTC per day, roughly 12,300 BTC across 90 days, would absorb nearly a third of miner issuance during the same period. Pair that with recent ETF net inflows, and the combined sink can outpace issuance without ad hoc bursts of demand.
The SEC’s in-kind regime lowers hedging costs for authorized participants, which, combined with a steady reserve bid, can reduce creation and redemption slippage that previously amplified cash conversions into spot prints during flow surges.
A structured lending posture would avoid outright sales or net buying, and instead extend term-limited, collateralized loans of bitcoin inventory to market makers and ETF-authorized participants.
That inventory supports in-kind baskets, market-making inventory, and borrow availability for basis trades.
Float does not fall into this setup, yet depth can improve at the top of the book, and realized volatility can ease during redemptions because participants can source coins through borrowing rather than forced purchases.
The trade-off is governance and credit policy, including haircuts, eligible collateral, and transparency around counterparties, which H.R. 5166 anticipates through its custody and cybersecurity plan requirement.
These posture choices interact with ETF flows and issuance, and the policy math is straightforward.
The table below frames a 90-day window using recent ETF data, issuance, and illustrative reserve actions.
| Treasury posture | SBR net flow (90d) | ETF net flow (90d)* | New issuance (90d) | Net Δ tradable float (≈ SBR + ETF − Issuance) | Likely market effect |
|---|---|---|---|---|---|
| HODL 29k consolidation | +29,000 (lockup) | +20,000 (30D run-rate ×3 ≈ +63k; use conservative +20k)** | 40,500 | +8,500 | Mild sink; supportive |
| HODL 100k consolidation | +100,000 | +20,000 | 40,500 | +79,500 | Strong sink; tighter float |
| Net-buy 12k (≈137 BTC/day) | +12,300 | +20,000 | 40,500 | −8,200 | Near balanced; depends on flows |
| Net-buy 30k | +30,000 | +60,000 | 40,500 | +49,500 | Clear sink; bullish bias |
| Lending 50k line (no sale) | ~0 (no net sale) | +20,000 | 40,500 | −20,500 | Neutral to slight supply growth; but lower vol via depth |
* ETF net flow shown over a 90-day horizon.
** 30-day run rate scaled ×3 suggests ≈ +63k; using conservative +20k.
Consolidation rows treat reserve transfers as float reductions that are not available to trade, which is useful for framing market impact.
The lending row shows a path where float does not decline, yet order book resilience can improve. The ETF column should be refreshed at publication using the same WalletPilot tracker, and the issuance column holds unless the block production rate shifts.
Macro context helps frame the U.S. choice
Germany’s federal police liquidated about 50,000 BTC in mid-2024, a sale path that ended before the subsequent rally and now anchors public debate about timing, proceeds, and loss versus hold strategies.
El Salvador continues to operate a national bitcoin position in parallel with an IMF program, which shows that reserve policy can coexist with orthodox funding arrangements when disclosures, custody, and operational controls are clear.
The Philippines has a bill on the table that would build a 10,000 BTC reserve over multiple years with lockups, which offers a staged template for accumulation and governance disclosures.
Although these cross-market cases are not direct analogues, they are useful comparators for cadence, transparency, and policy objectives.
The custody stack is unlikely to start from scratch. Per public contracting records, the U.S. Marshals Service maintains an institutional custody relationship with Coinbase Prime for seized digital assets. H.R. 5166 requires the Treasury to inventory third-party custody options in its 90-day plan, including cyber controls and balance sheet presentation.
The practical question, therefore, shifts from whether the federal government can custody Bitcoin to how reserve rules, accounting, and interagency transfers will be structured once Congress finalizes the vehicle that triggers the reporting clock.
Flows and plumbing set the forward path for volatility
Digital asset funds saw multi-billion dollar inflows through late summer, with the U.S. leading, which keeps the ETF sink active.
The current ETF base already removes more than a million bitcoin from tradable circulation, and in-kind operations lower conversion frictions for future creations and redemptions.
If the Treasury adopts a pure hold posture with sizeable consolidation, realized volatility can rise in stress as free float falls, while a lending posture can blunt stress by boosting borrow without sales.
A net buyer posture, even at modest scale, can turn the combined ETF plus reserve bid into a persistent sink that absorbs issuance most weeks, which tightens the balance between available supply and passive demand.
The headline clock is real, yet it starts only after enactment.
According to Congress.gov, H.R. 5166 requires the Treasury to deliver a practicability study for a Strategic Bitcoin Reserve and a custody and cybersecurity architecture within 90 days of the bill becoming law, with explicit treatment of transfer authorities, the Forfeiture Fund, and third-party custodians.
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