The problem is that when a state buys BTC, it doesn't magically become non-fiat. It will still be fiat, but its balance sheet will look better.

On the other hand, when (private) people stop using fiat and switch to BTC, the money printer magic trick stops working. The state will still print money, but nobody will want it, let alone hold it. Maybe people will earn fiat currency, but they'll immediately exchange it for BTC. This has a similar effect on the growth of consumer prices as pouring gasoline on a fire.

So the key isn't for states to start using Bitcoin, but quite the opposite - for Bitcoin to be used primarily by people and companies. That's the only way to take away the central bank's unfair privilege.

Of course, this won't ultimately prevent states from switching to BTC too - some have already figured this out. But the later this happens, the better. So if you're going to shill institutional adoption, better to focus on those treasury companies, even though having a UTXO with the ability to fulfill an unlock script is a far superior position for the future.

Yes, when states do have these strategic reserves, it temporarily pumps our bags. But we don't need it and if we're for it long term, it's better to avoid state adoption for as long as possible. Our bags will be more than fine, don't work. Nothing stops this train.