Key Insights
- Brazil lawmakers propose the creation of a sovereign Bitcoin reserve.
- If approved, Brazil will buy over 1 million to build its reserve in 5 years.
- Coinbase CEO Brian Armstrong says the US could inject $1 trillion to build up a Bitcoin reserve.
- Here’s how much Bitcoin exchange reserves have grown in the last 4 weeks.
Brazil is in the Bitcoin headlines for bringing its Bitcoin reserves back into the spotlight after they were overshadowed by bearish price action and unfavorable macro conditions. Here’s what you need to know.
Bitcoin reserves have been fading from Bitcoin news lately, even though there have been a few mentions here and there. This was not surprising given that the US has not been actively buying BTC despite previously indicating plans to do so.
One would think the US would be taking advantage of the currently discounted prices. However, the latest Bitcoin news on reserves comes from Brazil.
Lawmakers in the South American country have reportedly forwarded a proposal that aims to create a sovereign Bitcoin reserve.
Brazil may be in the Bitcoin news headlines for aggressive accumulation if passed
Brazilian lawmakers aim to allocate at least 1 million BTC to the sovereign Bitcoin reserves, according to the proposal. The country would need to invest at least $69.4 billion at press time.
However, the proposal suggests that the Bitcoin reserve would be built over a period of 5 years from the approval date. This means the overall investment might be higher, especially if the Bitcoin price achieves more recovery in the next 5 years.
The proposal suggests deploying a strategy similar to that of companies such as MicroStrategy and Metaplanet. Buying Bitcoin regularly, perhaps on a monthly basis.
The bill was forwarded for committee review, indicating there was no definitive indication it would be passed into law.
Brazil has now joined the growing list of countries planning to create sovereign Bitcoin reserves. The list includes Argentina, Poland, Japan, and Hong Kong (China’s administrative region).
It is worth noting that countries such as the US, Pakistan, and Bhutan already have existing Bitcoin reserves. Although for countries like the US, those reserves were composed mostly of coins seized from illegal activity.
The US may inject over $1 trillion into building its own Bitcoin reserves
Meanwhile, in the West, the US has not been actively buying or accumulating Bitcoin. This is despite making robust commitments towards becoming the leading country in crypto.
Those claims were the spark that initially ignited the whole sovereign Bitcoin reserve idea. Imagine what would happen if more countries jumped on the trend.
The US may still enter a Bitcoin accumulation phase. According to Coinbase CEO Brian Armstrong, the US may inject as much as $1 trillion into building its Bitcoin reserves.
Once again, no official confirmation has been made on when the US will commence this injection. However, some analysts believe it could be the next item on the agenda once the market structure bill is passed.
Still on the reserves agenda, the amount of Bitcoin on exchanges has been declining for months despite bearish activity. However, Bitcoin reserves on exchanges recently pivoted amid sell pressure that hammered investor confidence.
For context, there was more than 3.04 million BTC on exchanges by mid-March 2025. This was the highest level during the year, but the reserves bottomed out at 2.7 million BTC by 20 January 2025 (almost 12 months later).
More than 31,000 BTC was added back onto exchanges between 19 January and 14 February this year. Note that exchange reserves start growing when holders move funds to exchanges. This often happens during periods when the market anticipates further downside.
Holders may move funds to their private wallets with the intent to sell if things get worse. However, it may also be misleading because it does not represent actual selling pressure.
While it’s clear that countries are not yet there in terms of demand for Bitcoin, that might change soon, and Brazil might be among the countries buying. Few institutions have been building their reserves aggressively. It will be interesting to see how BTC price will behave once countries embrace the sovereign Bitcoin reserves trend.