North Carolina Proposes $10B Bitcoin ETF Investment

North Carolina Proposes 10% State Fund Investment in Bitcoin ETFs

North Carolina has proposed a bill that would allow the state to invest up to 10% of its funds in Bitcoin exchange-traded funds (ETFs). The bill, filed by Representative Destin Hall along with Representatives Mark Brody and Steve Ross, could potentially allocate over $10 billion to Bitcoin-based funds, including money from the state's General Fund, Highway Fund, and 24 special funds.

The proposed legislation sets a market capitalization requirement of at least $750 billion for qualifying digital assets over the previous twelve months. Currently, only Bitcoin meets this criterion, with its closest competitor, Ethereum, having a market cap of approximately $323 million.

The bill also establishes guidelines for investment management. Third-party investment managers handling digital assets must have at least $100 million in assets under management and provide annual audited financial statements to the State Treasurer, unless waived after a cost-benefit analysis.

North Carolina's proposal is part of a growing trend of US states introducing Bitcoin reserve legislation. In recent weeks, Montana, Florida, Maryland, Iowa, and Kentucky have filed similar bills. These states are exploring the integration of digital assets into their financial strategies, with varying approaches to investment caps, market capitalization requirements, and digital asset payments.

The bill's flexible investment approaches allow the State Treasurer to choose between direct investment in Bitcoin ETFs or indirect third-party investment management arrangements, both within and outside the United States. The Governor and Council of State would oversee the implementation of digital asset investments, ensuring proper management and accountability of public funds.

This legislation comes as Bitcoin's price continues to reach new heights, sparking increased interest from state governments in cryptocurrency investments. The rapid pace of cryptocurrency adoption at the state level is evident in the recent filings of Bitcoin investment bills by Montana, Maryland, and Kentucky.