Bitcoin Gains Traction as States Eye $23 Billion in Purchases

Bitcoin is gaining traction in the United States as a potential reserve asset for state governments. According to Matthew Sigel, Head of Digital Assets Research at VanEck, nearly 30 proposals are under review, with 20 of them having the potential to drive up to $23 billion in Bitcoin purchases, equivalent to approximately 247,000 BTC if enacted.

These proposals vary in their funding sources and investment percentages. For instance, Oklahoma's committee-level proposal seeks a 10% allocation from its $14.7 billion state funding sources, while Massachusetts targets its $8.8 billion "Rainy Day" fund. Texas, on the other hand, has advanced legislation that could commit at least 1% of unencumbered general revenue toward Bitcoin.

Some states, like New Hampshire and Montana, have not specified fixed investment percentages. Wyoming's effort, which once aimed for a 3% allocation of $27.1 billion, is marked as failed or dead. However, other states continue to push similar bills through committees or introductory stages. North Carolina recently joined this trend, introducing a plan to invest 10% of select state funds in Bitcoin.

Legislators cite various reasons for considering Bitcoin, including inflation hedging, diversification, and financial innovation. Critics, however, point to volatility and uncertain legal and political environments as barriers to broad adoption in state portfolios.

States differ in their funding approaches. Maryland explores allocations through a gambling enforcement revenue stream, while Ohio's proposal involves designated donations and interim state funds. Kentucky links Bitcoin investing to assets exceeding a specific market capitalization threshold. Supporters argue that even minimal positions can familiarize government entities with emerging technology and signal openness to private sector innovation.

While federal interest appears limited to early-stage discussions, state momentum suggests that local governments view Bitcoin as a strategic resource, particularly for specific budget categories and investment pools. Although some states have halted or rejected such efforts, the general pattern indicates a growing push to formalize Bitcoin holdings as part of state-level fiscal policy.

Legislative committees will continue to evaluate each bill, with some measures possibly returning for further debate despite initial setbacks. Proposals that survive committee scrutiny may undergo amendments before reaching final votes. If states enact these plans in substantial form, the combined effect could reshape how public money is allocated across the United States.