No, the bill does NOT propose to sell off any of the Federal Reserve's gold to buy Bitcoin. TL;DR: The bill doesn't propose to make ANY changes to the custody of U.S. held gold AT ALL.

First off, the Federal Reserve does NOT even own ANY gold; the U.S. Treasury does. Second, the gold is ALREADY used as collateral in the form of gold certificates held by the Federal Reserve. These gold certificates are currently valued at the 1970's era price of $42.22 per ounce for a total of ~$11B. This bill simply directs the updating of these gold certificates to reflect the current market value of gold and for the Federal Reserve to provide the U.S. Treasury with the ~$700B difference.

"(c) Federal reserve system gold certificates.—Not later than 180 days after the date of enactment of this Act, the Federal reserve banks shall tender all outstanding gold certificates in their custody to the Secretary. Not later than 90 days after the tender of the last such certificate, the Secretary shall issue new gold certificates to the Federal reserve banks that reflect the fair market value price of the gold held against such certificates by the Treasury, as of the date specified by the Secretary on each new gold certificate. Upon issue by the Secretary, each Federal reserve bank that receives a new gold certificate shall remit the difference in cash value between the old and new gold certificates to the Secretary for deposit in the general fund within 90 days."

https://www.congress.gov/bill/118th-congress/senate-bill/4912/text