Abstract: To address the challenges of massive data volume, significant storage/transmission pressure in GNSS signal acquisition, and the resource constraints of embedded devices, this paper proposes a GNSS signal compression algorithm based on dynamic bit truncation. The algorithm innovatively introduces an adaptive bit truncation processing mechanism. This mechanism dynamically determines the optimal truncation depth by evaluating multiple parameters, such as sampling rate, storage status, and signal quality requirements. It significantly enhances data storage and transmission efficiency while maintaining signal validity. Test results demonstrate that in multi-band simultaneous acquisition scenarios, the system maintains signal integrity even when a minimum bit width of 1 bit is applied for truncation, achieving a total data volume reduction of approximately 93%. The algorithm effectively balances field programmable gate array(FPGA) resource consumption and signal quality, providing a viable solution for developing portable and efficient GNSS recording and playback devices. It holds broad application potential in fields such as navigation terminal testing, unmanned aerial vehicle spoofing, signal research, and educational demonstrations.