Veteran Bitcoin (CRYPTO: BTC) advocate Trace Mayer has raised doubts about the U.S. government's ability to amass a large portion of the global Bitcoin supply, warning that attempts to acquire 5 million BTC could dramatically impact the market.

What Happened: In a conversation with Pete Rizzo at the Digital Asset Summit in New York, Mayer questioned recent calls by industry leaders such as Strategy Executive Chairman Michael Saylor and U.S. Senator Cynthia Lummis (R-Wyo.), who have floated the idea of a national Bitcoin reserve on the scale of millions of coins.

"They would have a hard time," Mayer said during his appearance on the Supply Shock podcast. "Where are they going to get 5 million coins? How many coins got added into the ETFs? Meanwhile, the price moved from $30,000 to $80,000."

Mayer, believed to own over 25,000 BTC himself, warned that such aggressive buying would strain market liquidity and accelerate price volatility.

Also Read: Strategy Could Hold Up To 1 Million Bitcoin By 2033: Bernstein

Instead of entering the open market to build reserves, Mayer proposed incentives to encourage voluntary supply movement.

"Maybe you don't have to pay capital gains tax on Bitcoin or crypto gains if you pay your taxes with them," he suggested, proposing a policy-driven method to coax more BTC into circulation.

While acknowledging Bitcoin's role as a "geopolitical asset," Mayer was cautious about whether it benefits the United States to fast-track its dominance.

"Why would it be in the interest of the U.S. to accelerate that any faster than it needs to?" he asked, warning of potentially unnecessary financial costs.

He suggested a more layered approach: one that maintains the dollar's dominance while weaving Bitcoin into the broader U.S. economic system.

"Keep the world reserve currency, drain all the other nations of their physical bullion, and the thing that could potentially challenge gold, dominate that too," Mayer said.

According to Mayer, the U.S. could bolster its financial leadership by integrating Bitcoin into corporate balance sheets, supporting citizen adoption, and enabling innovation through favorable regulation.

He also argued that stablecoins could help the U.S. project its monetary power globally by "extending the dollar" and limiting other nations' financial sovereignty.

What’s Next: While the long-term geopolitical consequences remain uncertain, Mayer expressed enthusiasm for Bitcoin's global trajectory.

"This is incredibly exciting," he said. "Bitcoin is simply fulfilling its destiny as a world reserve settlement currency."

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