Nearly two dozen states in the United States are currently considering legislation aimed at creating strategic reserves of Bitcoin, indicating a notable transformation in the approach of public funds toward cryptocurrency. According to estimates from investment firm VanEck, if these proposed bills are passed, states could potentially amass around 247,000 BTC, translating to an approximate value of $23.7 billion at present market rates.
Reasons Behind State Investments in Bitcoin
State-managed investment funds are contemplating Bitcoin (BTC) for a variety of compelling reasons. As a hedge against inflation, Bitcoin is often referred to as “digital gold,” recognized for its ability to protect against the erosion of currency value. Additionally, cryptocurrencies operate independently from traditional financial systems, offering diversification benefits. The historical rise in Bitcoin’s value also suggests significant growth potential, leading Galaxy Digital’s head of research, Alex Thorn, to project that Bitcoin prices could soar to $185,000 by the end of 2025.
States Actively Pursuing Bitcoin Investments
Several states are already taking steps toward Bitcoin investment. In Alabama, State Auditor Andrew Sorell expressed a strong belief in establishing a strategic Bitcoin reserve, emphasizing that the global ownership of cryptocurrency has solidified its presence in the financial landscape.
In Arizona, the Senate Finance Committee recently voted in favor of the “Arizona Strategic Bitcoin Reserve Act,” which would enable the state to invest up to 10% of its public funds in Bitcoin and other digital assets. This bill is set to move forward for further discussion and potential amendments.
Florida’s Chief Financial Officer, Jimmy Patronis, has requested a feasibility report on the possibility of investing state retirement funds in cryptocurrency, stressing the importance of maximizing returns for state pension beneficiaries.
In Kansas, a newly proposed bill could allow the Kansas Public Employees Retirement System to allocate up to 10% of its assets into Bitcoin ETFs, potentially altering the investment landscape for public employee pensions.
Illinois is also making moves, with a Bitcoin Strategic Bill being referred to the Rules Committee to expedite its approval. This legislation aims to classify Bitcoin as a strategic asset, allowing the state treasurer to manage a fund that could accept various forms of contributions, including Bitcoin donations.
Iowa has introduced a bill aimed at investing public funds into Bitcoin and digital assets, reflecting a growing interest in cryptocurrency among state legislatures.
In Massachusetts, State Senator Peter Durant has proposed a bill to channel unallocated state funds into Bitcoin and other digital currencies, signaling an openness to innovative investment strategies.
Michigan is also engaging with Bitcoin, as the State of Michigan Retirement System disclosed its holdings of 110,000 shares of the ARK 21Shares Bitcoin ETF, valued at approximately $6.6 million as of mid-2023.
Missouri’s Representative Ben Keathley has introduced legislation to create a Bitcoin Strategic Reserve Fund, positioning Bitcoin as a potential safeguard against inflation while diversifying the state’s financial portfolio.
Montana is eyeing a $50 million investment in digital assets, including Bitcoin, through House Bill 429, which would authorize this allocation by mid-2025.
New Hampshire’s Representative Keith Ammon has introduced a bill that could enable the state’s treasury to include Bitcoin as a reserve asset, further highlighting the growing interest in cryptocurrency.
In New Jersey, Mayor Steven Fulop hinted at plans for the city’s pension fund to gain exposure to Bitcoin ETFs, although specific details have remained scarce since his initial remarks.
New Mexico’s Senator Anthony Thornton has proposed a bill that would allocate 5% of public funds into Bitcoin, reflecting a commitment to exploring digital asset investments.
North Carolina’s legislature has advanced discussions on the feasibility of incorporating Bitcoin into state investments, and a recent bill has been introduced to allow the state to invest in digital assets through exchange-traded products.
North Dakota has introduced Resolution 3001, which advocates for investing state funds in digital assets while also protecting the rights of Bitcoin miners through supporting legislation.
In Ohio, a proposed bill seeks to allocate up to 10% of state-controlled funds toward a Bitcoin reserve, leveraging the state’s natural gas resources to meet energy demands associated with cryptocurrency mining.
Pennsylvania previously considered a bill that would authorize state treasurers and public pension funds to invest in Bitcoin, though it did not pass, it sparked considerable dialogue on the topic.
South Dakota’s House Bill 1202 aims to empower the state government to invest public funds in Bitcoin, while Texas is looking to create a distinct Bitcoin reserve funded by taxes and donations, with a commitment to not sell the state’s Bitcoin for at least five years.
Utah’s digital asset taskforce has been actively working on cryptocurrency-related legislation, with a focus on developing a strategic Bitcoin reserve, as noted by the Satoshi Act Fund’s founder.
Wisconsin has made headlines as the first state to invest in Bitcoin ETFs, holding 3.1 million shares valued at approximately $588 million as of late 2024.
Lastly, Wyoming is considering legislation that would allow up to 3% of state funds to be invested in Bitcoin, marking a significant step in the management of public funds. If passed, the state treasurer would be authorized to invest directly in Bitcoin through secure custodial solutions or exchange-traded products.
The Future of Bitcoin in State Investments
As legislative momentum builds, the role of Bitcoin in state investment strategies is increasingly evolving. Should more states proceed with their proposed legislation, Bitcoin may well become a central asset within public pension funds throughout the nation.
