This is a valid concern here. The strength of Bitcoin comes from decentralization without a particular group having any influence to force it against it's broader network will, so if the government holds 25-35% of the total supply, it could be a balanced tilt.
It is true that Bitcoin makes direct control hard, but miners, nodes, and users internationally may have to accept any change, concentrated ownership by powerful actors might affect incentives and raise fear, though technical attack may fali, but threats can damage market confidence and price stability.
It is less risky when small states holds hundreds of thousands of Bitcoin, it could add legitimacy and prove institutional adoption without overtaking supply. Rather when larger government pursue to acquire millions,then grows the risk of coordinated influence.
Striking the balance between institutional adoption and decentralization is a challenging task. Smaller nations holding Bitcoin can legitimize it as an institutional asset without significantly disrupting the decentralized balance. However, when larger nations begin acquiring large amounts of Bitcoin, it opens up the potential for more coordinated market manipulation. While Bitcoin is designed to be resistant to technical attacks, the threat of economic influence and fear of market imbalances could dampen long-term interest in Bitcoin. A proper balance between state influence and individual freedom is essential for Bitcoin to remain decentralized and trustworthy.