Theoretically, this would be a likely scenario that could push Bitcoin's price to a new ATH. However, in practice, several conditions must be considered, which can be concluded from the experiences of some countries.
Some countries are governed by totalitarian regimes where decision-making power lies with one person or one party, who determines financial policies and strategic reserves. These countries typically have poor economies, and the decision to create a Bitcoin reserve is an attempt to overcome the current crises. Two examples are El Salvador and the Central African Republic, which suddenly decided to recognize Bitcoin as a legal tender and establish a strategic reserve; The Central African Republic halted the project after realizing it lacked the necessary infrastructure and funding sources for purchases, while El Salvador was unable to benefit from Bitcoin and was forced to stop purchasing more of it in order to obtain a loan from the FMI.
Other countries are led by democratic regimes. The United States is a prime example. President Trump recently decided to establish a reserve fund for cryptocurrencies. However, he faced a challenge with Congress in determining the sources of purchases, i.e., where he would source the funds to fill the crypto reserve portfolio, since he is not permitted to touch taxpayers' money without Congress approval.