West Virginia Proposes Bitcoin Treasury Hedge Against Inflation

West Virginia has introduced legislation that seeks to include Bitcoin in its treasury as a hedge against inflation. The Inflation Protection Act of 2025, proposed by State Senator Chris Rose, aims to allow the West Virginia Treasury to diversify its holdings by investing in digital assets and precious metals.

The bill, submitted on Feb. 14, suggests investing in digital assets with a market capitalization exceeding $750 billion, which currently applies only to Bitcoin (BTC). The legislation proposes capping investments in digital assets and precious metals at 10% of total treasury funds, offering flexibility to hold assets either on-chain or through exchange-traded funds (ETFs). Proponents argue that such diversification could provide a hedge against inflation and fiscal instability.

West Virginia is among almost two dozen US states considering digital asset reserves as a strategy to protect public funds from currency devaluation. The trend began with Wyoming in 2024 and has since gained traction in states like Utah, Kentucky, and Michigan. At the federal level, President Donald Trump has directed a working group to explore the feasibility of a national digital asset reserve.

Analysts suggest that increasing state-level adoption of Bitcoin reserves could drive additional demand for digital assets, potentially influencing market prices and broader financial market trends. A recent analysis by asset management firm VanEck estimates that states pursuing such legislation could contribute up to $23 billion in Bitcoin demand. This trend may also encourage greater institutional involvement in the digital asset space as state treasuries begin treating Bitcoin as a legitimate reserve asset alongside traditional stores of value such as gold.

The West Virginia bill will now proceed to committee review before further legislative consideration. Lawmakers and analysts will closely watch how the state navigates the challenges and opportunities of digital asset adoption, including the potential risks posed by Bitcoin's price volatility.