The United States could generate up to $14 trillion in cumulative value if 1% of federal taxes were paid in Bitcoin over the next twenty years, according to new modeling from the Bitcoin Policy Institute, presented alongside Rep.’s Bitcoin for America Act. Warren Davidson.
The bill, introduced on November 20, would allow taxpayers to settle federal debts in Bitcoin and send any incoming coin to the strategic Bitcoin Reserve created by executive order earlier this year.
He declared:
“The Bitcoin for America Act will position our country to lead – not follow – as the world navigates the future of sound money and digital innovation.”
Bitcoin acquisition through tax
The proposal adds a new acquisition channel to the federal framework established in March, when the White House ordered all seized Bitcoin to be consolidated into a special reserve and non-Bitcoin assets to be placed in a separate digital stockpile.
This move ended years of auctions and shifted the government to an accumulation structure rooted in forfeiture flows.
Facts Bitcoin Treasuries shows US federal entities control 326,000 BTC following enforcement actions and asset recoveries, although attributions continue to evolve as new wallet clusters are identified.
Davidson’s bill changes the mechanisms by allowing voluntary Bitcoin payments to the IRS and eliminating the recognition of capital gains on those transactions.
According to the bill text, the Ministry of Finance would cooperate with regulated financial institutions in custody, settlement and cold storage operations, while recording taxpayer payments at fair value for the satisfaction of liability.
The structure offers individuals and companies a way to transfer appreciated Bitcoin without generating a profit, which under current rules often prompts holders to sell for dollars before paying the IRS.
The change directs Bitcoin directly to the reserve, creating a market-driven inflow that doesn’t require credits or direct purchases of government bonds.
Revenue modeling and valuation
The Bitcoin Policy Institute endorsed the legislation and released a model showing how Bitcoin tax payments can build a significant reserve through steady annual inflows.
According to Treasury Department data, federal revenues totaled about $5.23 trillion in the 2025 fiscal year. If 1% of national taxes were paid in Bitcoin, the inflow at current revenue levels would be roughly $52.3 billion per year.
Depending on the average Bitcoin price over the period, this translates into hundreds of thousands of coins collected per decade. A ten-year horizon at 1% adoption yields roughly 350,000 to 700,000 BTC added to the reserve if Bitcoin averages between $75,000 and $150,000.
At the same time, the higher adoption levels scale linearly, with a 5% scenario yielding approximately 1.7 to 3.5 million BTC over the same range, although liquidity constraints would likely impact prices in practice.
Meanwhile, the BPI’s longer twenty-year scenario assumes constant adoption, a stable cost base, and no reflexive price effects from federal purchasing pressure.
According to that model, 1% adoption between 2025 and 2045 would yield more than 4.3 million BTC, with an implied base price of about $3.25 million per coin.
The institute calculates a net benefit of nearly $13 trillion compared to maintaining the same cash equivalent flows. This upper bound combination of adoption and long-term price development reflects the compounding effect of holding for a long time in a reserve that does not sell any incoming Bitcoin.
The macro background determines how the policy is interpreted. Federal deficits remain high and the 2025 budget year is coming to an end nearly a $1.8 trillion deficit at $5.23 trillion in revenue, according to the Congressional Budget Office. Interest costs remain high compared to historical norms.
As a result, proponents view Bitcoin flows as a balance sheet hedge against dollar liabilities, while critics focus on the volatility that an unprofitable asset brings when valued in the market.
The executive order itself described the Strategic Bitcoin Reserve as a long-term depository for government-owned Bitcoin, drawing parallels to the way governments manage gold stocks rather than short-term liquidity positions.
Market and operational risks
Operational implementation under Davidson’s proposal would require an overhaul of the Treasury Department, which would require intake systems that time-stamped prices, managed refund protocols for intraday volatility, and enforced sanctions screening on incoming UTXOs.
These technical mandates, including aligning multi-signature governance with federal cybersecurity standards, complicate the revenue score for budget analysts by removing the taxable events typically triggered when holders sell for dollars.
In addition to internal logistics, the sheer size of these inflows introduces volatility risks to the broader market structure.
At 1% adoption, the government’s annual Bitcoin intake approaches the volume of turnover on spot exchanges during quiet periods, and higher participation rates would push flows towards daily net issuance levels.
This continued accumulation could reduce free float in bull cycles and widen spreads as buyer profiles become predictable, challenging the BPI model’s assumption that federal purchasing will not have a reflexive impact on price.