"Congress Eyes Bitcoin Reserve Amid Institutional Adoption"

Congress is exploring the possibility of establishing a strategic Bitcoin reserve amid confusion over the definitions of sovereign wealth funds and the varying state-level legislation. The move comes as the crypto sector gains increased institutional adoption, with multiple spot Bitcoin ETFs approved in the US last year.

Trump Media and Technology Group Corp. (TMTG) has announced plans to expand into financial services, including the launch of a spot Bitcoin (BTC) exchange-traded fund (ETF). The company, led by former President Donald Trump, has partnered with Yorkville Advisors to manage the regulatory process and product structuring. TMTG aims to give investors alternatives to traditional asset management firms and focus on Bitcoin as a competitive alternative to "woke funds" and "debanking problems."

Meanwhile, Arthur Hayes, co-founder of BitMEX, has criticized the proposed US Strategic Bitcoin Reserve (SBR), arguing that it would be a misguided political stunt. He warned that a new administration could liquidate the Bitcoin reserve to fund political initiatives and that the initiative might serve as a temporary political stunt rather than a long-term commitment. Hayes also expressed concerns about the potential regulatory bill, which he believes would favor established financial institutions and stifle innovation.

Newly appointed crypto czar David Sacks has clarified that the bicameral crypto working group is looking into a strategic Bitcoin reserve (SBR) and that the concept of the sovereign wealth fund is separate. Sovereign wealth funds (SWFs) are government-owned investment funds that manage national savings, often built from surplus revenues like oil profits or trade gains. Their main goal is to grow and protect wealth long-term, ensuring economic stability for future generations.

As of February 4, 23 states have introduced Bitcoin and digital asset legislation. Some states already have SWFs that fall under the classical definition, such as the Alaska Permanent Fund and Texas’ Permanent School Fund. Additionally, 15 states have separate Bitcoin and digital asset reserve bills, with Arizona and Utah tied in the lead at the chamber vote level. The rapid emergence of Bitcoin and digital asset reserve legislation at the state level signals a fundamental shift in how governments view crypto as a speculative asset and a potential strategic reserve.