That’s not really how markets work
Discussion
Explain why that doesn’t work?
Governments cannot actually buy Bitcoin at “any price”, they can only buy it for at or above market prices. This causes them to run into problems like needing to find sellers and potentially removing liquidity and pushing prices higher.
If governments then sell Bitcoin for losses at below market prices, market participants will simply buy cheap Bitcoin and arbitrage it with the old market price until a new balance is established. Essentially all you would
be accomplishing is burning and inflating your own fiat currency, to create net Bitcoin volatility. Short term, sure the government could negatively impact Bitcoin price. But long term, it would be making its rise more inevitable.
Only in fiat can you sell things you don’t already own.
Agree with you in Macro and long term. In short term they would be both buyers and sellers, algorithms will optimize transaction size and frequency. As soon as more people or even another country enter the scene, your liquidity argument takes over and the jig is up. Let’s see how long it takes…