The Race for a Strategic Bitcoin Reserve in the U.S.
A couple of years ago we wouldn’t have thought that the U.S. is researching the possibility of a Bitcoin Strategic Reserve but it's becoming an increasingly frequently mentioned topic. While some politicians such as Senator Cynthia Lummis have introduced legislation for a national Strategic Bitcoin Reserve, other politicians would like to see a reserve on state-level as well. But what is the current progress?
How many states have proposed legislation?
The first state to propose a Bitcoin Reserve was Pennsylvania on the 14th of November, since then, there has been an acceleration of states proposing legislation. In total, 25 states have proposed legislation. In the illustration below you can see the current state of the reserve. As observed, Pennsylvania, North Dakota, and Wyoming have rejected the first proposals.
However, Utah and Arizona are taking the lead as the first legislation passed through the first rounds. This is a promising development, however, the legislation needs a total of four rounds before it goes into effect. But if this pass, Utah and Arizona will acquire a total of approximately 38,000 Bitcoin, against a price of $95,400, worth $3.6 billion.
One state that is certainly worth watching is Texas. While the state only proposed legislation on January 16th and has not made significant progress yet, it holds the potential to acquire over 245,000 Bitcoin, assuming a price of $95,400, which would amount to nearly $24 billion.
Although we don't expect all states to introduce Bitcoin legislation, we anticipate that an increasing number will explore the possibility of investing in Bitcoin or even altcoins, especially as 25 states are already considering it. Moreover, if one state strategically decides to invest in Bitcoin, it could set off an accelerated race, as others will likely want to avoid falling behind.
The impact of such moves could be substantial. Not only would significant capital flow into the markets, but digital assets would also be positioned in a new light, maturing further and increasingly finding their place in institutional portfolios.
What do we expect?
Although the legislative process is moving slowly, we anticipate that the first U.S. state will approve a full or partial Strategic Bitcoin Reserve in 2025. While it would be exciting to see Texas, with its significant capital, lead the way in approving such legislation, we believe any state taking the initiative will be a positive step. We view this as the potential catalyst for a domino effect, prompting other states to acquire more digital assets.
Moreover, this could accelerate the possibility of a national-level strategic reserve, particularly if Bitcoin's price begins to rise as these states start acquiring assets—or as investors and traders position themselves to front-run state purchases.
That said, as mentioned earlier, legislation tends to progress slowly. For now, the market must patiently await the passage of these bills through the various voting rounds. Nevertheless, this is a development worth monitoring, as shifts in policy can often move slowly at first and then quickly gain momentum.