In recent years, Arizona in the United States has proposed the establishment of a government-level "Bitcoin Reserve", planning to incorporate Bitcoin into the state's financial asset allocation. This trend has sparked widespread discussion about the potential impact on the virtual currency market. If this policy is implemented, it may reshape the Bitcoin market landscape in the following three ways:

**1. Policy Endorsement Enhances Market Confidence**

Government agencies directly holding Bitcoin as a reserve asset is essentially an acknowledgment of its "digital gold" attribute, which helps to weaken external doubts about Bitcoin being a "speculative bubble". This move may encourage more conservative institutional investors such as sovereign funds and pension funds to enter the market, accelerating Bitcoin's alignment with mainstream asset classes. Historical data shows that similar policy signals often trigger short-term price fluctuations; for instance, when El Salvador adopted Bitcoin as legal tender in 2021, the price surged by 35% that month.

**2. Liquidity Management Affects Market Supply and Demand**

If Arizona regularly uses its fiscal revenue to purchase Bitcoin, it would effectively establish a long-term "institutional buying interest". Based on the state's estimated fiscal revenue of approximately $18 billion in 2023, even allocating 1% would imply an annual incremental demand of $180 million, accounting for about 12% of the current daily trading volume of Bitcoin. Such systematic purchasing may alleviate market panic selling, but large-scale selling could also become a new trigger for volatility.

**3. Catalyst for Regulatory Paradigm Shift**

Government holdings of Bitcoin will push for improvements in the regulatory framework. Arizona may be the first to introduce Bitcoin tax regulations, custody security standards, and audit norms, and these experiences could be referenced at the federal level. The advancement of the compliance process will lower the entry threshold for institutions, leading to a potential new wave of institutional client growth for trading platforms like Coinbase, but the conflict between the decentralized ethos and regulatory demands may intensify.

**Potential Risks and Challenges**

The inherent conflict between government reserves and Bitcoin's censorship-resistant characteristics, the impact of severe price volatility on fiscal health, and asset security issues caused by technical vulnerabilities remain major obstacles to the implementation of the policy. If other states follow suit, it could trigger regulatory competition, potentially exacerbating market policies.