States' Bitcoin Reserves Could Drive $23B Demand

As the market awaits the feasibility of a U.S. national Bitcoin [BTC] Reserve by President Donald Trump’s digital asset working group, a similar momentum led by states has gained traction. Mathew Sigel, VanEck’s Head of Research, projected that 20 U.S. state-led BTC Reserve bills, if approved, could generate +$23B in demand for the king coin. Sigel stated, “If enacted, they could drive $23 billion in buying, or 247k BTC. This sum is independent of any pension fund allocations, likely to rise if legislators move forward.”

While some states have capped the fund allocation between 1%-10%, others have no limits. Pierre Rochard, VP of Research at BTC miner Riot Platforms, noted that Texas’ bill has removed the annual buying limit of $500 million, allowing the legislature to appropriate as much as it wants to save BTC. Simply put, the demand could surpass the $23B estimated by VanEck. Andre Dragosch, Bitwise Europe’s Head of Research, noted that the demand would be 2.5X the annual BTC supply. “So, the 20+ US states would probably buy as much bitcoins as the federal government already. Combined, they would already soak up around 2.5x times the annual new supply of bitcoins.”

Utah and Arizona bills led the rest after proceeding to the second reading and first chambers. However, three state bills, including Wyoming, have failed to progress. It remains to be seen if Utah will be the first state to legally create a BTC Reserve. The impact on BTC demand dynamics is still uncertain.