Core Insights - Ark Invest's CEO Cathie Wood predicts that President Donald Trump will begin purchasing Bitcoin for a strategic reserve before the 2026 midterms to maintain political momentum and support from the crypto voter base [1][2]. Group 1: Motivations for Bitcoin Purchases - The first motivation is to avoid becoming a lame duck president, as losing midterms typically limits a president's ability to pass legislation and advance their agenda [2]. - The second motivation stems from Trump's family's significant investments in Bitcoin and crypto assets, which faced pressure due to poor performance in 2025 [3]. - The third motivation is the crucial role the crypto community played in Trump's 2024 election victory, necessitating the delivery on promises to maintain support [4]. Group 2: Strategic Initiatives - Wood anticipates that Trump will collaborate with his crypto and AI czar to advance initiatives such as building a strategic Bitcoin reserve and passing a de minimis tax exemption for small Bitcoin transactions [4]. - The original plan aimed for a reserve of 1 million Bitcoin, but currently, the reserve only consists of seized assets from criminal cases [4]. Group 3: Economic Context - The administration's ability to purchase Bitcoin is constrained by the requirement for budget neutrality, as stated by AI and crypto czar David Sacks [5]. - Wood believes that stronger-than-expected economic growth will provide workarounds to this constraint, allowing for Bitcoin purchases without increasing the deficit [5]. - Recent tax changes, including a reduction in the effective U.S. corporate tax rate to 10% and 100% first-year depreciation for manufacturing facilities, are expected to drive significant GDP growth, increasing tax revenue and creating fiscal space for Bitcoin purchases [6][7].