And more importantly, will ordinary people still benefit from it?
Of course. People who already own Bitcoin and still buy it regularly, even if it's not as much as the government is buying, will still "benefit" from Bitcoin.
People who Own’s will benefit from price increase, people who don’t known will suffer what the price increase will bring as they might not be able to lay their hand in what they will want to acquire, but it will be more of advantage that disadvantage since everyone who hold will enjoy massive increase in their portfolio, and government full involvement will bring about exposure to Bitcoin as many will not be aware that it’s not something they should be afraid of.