- U.S. state-level BTC Reserves could attract $23B in demand.
- Utah’s Reserve bill progressed much and led the rest, followed by Arizona.
As the market waits for the feasibility of a U.S. national Bitcoin[BTC] Reserve by President Donald Trump’s digital asset working group, a similar momentum led by states has picked pace.
Mathew Sigel, VanEck’s Head of Research, projected that 20 U.S. state-led BTC Reserve bills, if approved, could generate +$23B demand for the king coin. Sigel stated,
“If enacted, they could drive $23 billion in buying, or 247k BTC. This sum is independent of any pension fund allocations, likely to rise if legislators move forward.”
Source: VanEck
Is a BTC supply shock coming?
While some have capped the fund allocation between 1%-10%, some states have no limits.
According to Pierre Rochard, VP of Research at BTC miner Riot Platforms, Texas’ bill has not capped the BTC allocation amount.
He said,
“The new legislative text for the Texas Strategic Bitcoin Reserve, SB 21, is very bullish! It removes the annual buying limit of $500 million; the legislature can appropriate as much as it wants to save BTC.”
Simply put, the demand could surpass the $23B estimated by VanEck.
Commenting on the same, Andre Dragosch, Bitwise Europe’s Head of Research, noted that the demand would be 2.5X the annual BTC supply.
“So, the 20+ US states would probably buy as much bitcoins as the federal government already. Combined, they would already soak up around 2.5x times the annual new supply of bitcoins.”
Source: Bitcoin Laws
That said, Utah and Arizona bills led the rest after proceeding to the second reading and first chambers. However, three state bills, including Wyoming, have failed to progress.
It remains to be seen if Utah will be the first state to legally create a BTC Reserve. The impact on BTC demand dynamics is still uncertain.
