U.S. States Consider Strategic Bitcoin (BTC) Reserves

As many as 18 U.S. states are considering creating strategic Bitcoin (BTC) reserves.

If the proposed legislation is adopted and the states proceed with the crypto reserves, it could lead to the buying of an additional $23 billion worth of Bitcoin, say analysts at Wall Street investment firm VanEck. Legislators in states such as Massachusetts, Ohio, Texas, Illinois, North Carolina and Florida have introduced bills proposing to establish government reserves that invest in Bitcoin and other crypto.

It remains unknown how many of the bills will actually be passed. More than 20 bills have previously been proposed at the state level and legislation in states such as Pennsylvania, Wyoming and North Dakota have failed. However, state interest in a strategic Bitcoin reserve is on the rise since Donald Trump was re-elected U.S. president and mused about creating a BTC reserve at the federal level in America.

Investing in Crypto

Most of the state-level bills have been introduced by Republican lawmakers, with some also proposing to allow their state pension funds to invest in BTC. A few U.S. states, such as Wisconsin and Michigan, already allow their pension funds to invest in cryptocurrencies.

Proposed funding sources for the state Bitcoin reserves include general funds, gifts, and criminal forfeitures. If enacted, the states could each invest billions of dollars in Bitcoin, says VanEck’s Matthew Sigel, head of digital-assets research at VanEck. He adds that his estimate of $23 billion of Bitcoin buying is a “conservative” number.

Bitcoin’s price has risen 86% over the last 12 months.

Is BTC a Buy?

Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has risen 5.87% in the last 12 weeks.