20 US State Bitcoin Reserves Could Alone Drive $23B Inflow as More Follow
-
Loading... - Arie Borst
- 13 Feb 2025
- 21 Views
- 0 Like
- 0 Comment
As Bitcoin legislation advances at the state level in the United States, nearly 30 proposals are under consideration that would direct state funds into Bitcoin reserves. According to Matthew Sigel, Head of Digital Assets Research at VanEck, 20 of these bills could potentially lead to an influx of up to $23 billion in Bitcoin purchases, equating to approximately 247,000 BTC, if enacted. This figure does not include any potential allocations from pension funds that may arise if state legislators proceed with these initiatives.
Diverse Approaches to Bitcoin Investment
Several state measures are focusing on channeling various funding sources into Bitcoin, including general budgets, special revenue accounts, and “Rainy Day” funds. For instance:
- Oklahoma has proposed a 10% allocation from its $14.7 billion state funding sources, which would amount to more than 15,000 BTC.
- Massachusetts introduced a measure targeting its $8.8 billion “Rainy Day” fund.
- Texas is advancing legislation that could commit at least 1% of unencumbered general revenue toward Bitcoin.
While some proposals specify exact percentages, others, like those from New Hampshire and Montana, do not set fixed figures. Wyoming had previously aimed for a 3% allocation of its $27.1 billion but has seen its efforts stall. Other states, including Iowa, Missouri, New Mexico, and South Dakota, are also considering varying percentages, indicating a shared belief that Bitcoin could serve as a hedge or alternative store of value.
Recent Developments and Trends
North Carolina has recently joined the trend by introducing a plan to invest 10% of select state funds in Bitcoin. Proponents of these measures cite reasons such as inflation hedging and diversification, while others express a desire to embrace financial innovation. However, critics point to Bitcoin's volatility as a significant barrier to broader adoption in state portfolios, alongside concerns about the uncertain legal and political landscape.
States are exploring different funding approaches for Bitcoin investments:
- Maryland is considering allocations through a gambling enforcement revenue stream.
- Ohio has proposed using designated donations and interim state funds.
- Kentucky links Bitcoin investing to assets exceeding a specific market capitalization threshold, primarily affecting Bitcoin due to its historical dominance in the digital asset space.
Supporters argue that even minimal positions in Bitcoin can help government entities familiarize themselves with emerging technology and signal openness to private sector innovation.
Federal Interest and Future Outlook
While federal interest in Bitcoin remains limited to early-stage discussions, there have been public statements from the Trump administration and some lawmakers regarding the idea of a national Bitcoin reserve. However, no definitive action has been taken on this front.
The momentum at the state level suggests that local governments are increasingly viewing Bitcoin as a strategic resource, particularly for specific budget categories and investment pools. Although some states have halted or rejected such initiatives, the overall trend indicates a growing push to formalize Bitcoin holdings as part of state fiscal policy.
Legislative committees will continue to evaluate each proposal, with some measures potentially returning for further debate despite initial setbacks. Proposals that survive committee scrutiny may undergo amendments before reaching final votes. The broad interest in Bitcoin highlights its potential role in government strategies, and if states enact these plans, the combined effect could significantly reshape how public funds are allocated across the United States.
