The growing momentum of cryptocurrency adoption is seen in the Texas House of Representatives introduction of a groundbreaking bill to create a Bitcoin reserve for the state. The idea is to use this strategic reserve in Bitcoin for Texas to hold Bitcoin for at least five years, Republican State Representative Giovanni Capriglione said in the proposal submitted to the state.
The bill to establish a ‘Strategic Bitcoin Reserve’ in the state of Texas was filed live on X spaces. History has been made. pic.twitter.com/8IZdoMmKYj
— Dennis Porter (@Dennis_Porter_) December 12, 2024
The legislation, a response to the growing demand for Bitcoin adoption that has coincided with former President Donald Trump’s political success, was presented live on an X Spaces event Thursday evening. Capriglione contended that the state’s Bitcoin reserve would defend against U.S. and global inflation and put it in a position to snap up the asset’s surging value.
Capriglione said he wants to work with fellow lawmakers to flesh out the bill to be as flexible and comprehensive as possible. As part of a proposal to integrate Bitcoin into the state’s financial infrastructure and to be posters of it, the proposal urges donations, taxes, and fees to be collected in Bitcoin.
Bitcoin’s Surge Sparks National Strategic Reserve Discussions
This follows a 50% spike in Bitcoin value since Trump’s November 6 political victory, which many political analysts, including former White House Communications Director Anthony Scaramucci, called ‘the greatest political comeback in U.S. history.’ This spiking of Bitcoin’s value has prompted talk of a national strategic Bitcoin reserve.t
At a Bitcoin conference in Nashville, Trump vowed to hold onto 100 percent of the U.S. government’s 207,000 BTC, previously Democrat Hillary Clinton’s. By contrast, Senator Cynthia Lummis’ bill calls for the accumulation of just 4% of Bitcoin’s total 21 million supply. Such high-profile endorsements by state governments have led a number of states to explore Bitcoin reserves.
Besides Texas, states like Arkansas, Louisiana, Montana, Oklahoma, and Pennsylvania have also passed laws to protect the right to self-custody, the right to cryptocurrency mining, and the right to peer-to-peer transactions. Andrew Sorrell, Alabama’s State Auditor General, has even recommended a state-level Bitcoin reserve. Data suggests that at least 12 states may follow suit by introducing similar legislation, according to Dennis Porter, the founder of the Satoshi Fund Act.
However, not everyone supports the move to ubiquitous Bitcoin adoption. Critics like investment veteran Charles K. Bobrinskoy have equated Bitcoin with a bubble, urging governments not to put it on their reserve lists and even calling the asset worthless.
Some wealth managers, such as BlackRock, are cautious about adopting large-scale government Bitcoins like Bobrinskoy. This is despite the fact that Bitcoin-backed products such as spot exchange-traded funds (ETFs) have enjoyed some popularity and that BlackRock has advised investors to allocate up to 2 percent of their portfolios to Bitcoin.
Tim Ogilvie, vice president of Institutional Sales for Kraken, also supports this view. However, Ogilvie thinks the move could benefit long-term investors.
Cryptocurrencies – starting with Bitcoin, and now moving into Ethereum – have become cornerstones of a well-balanced portfolio. While we are still very early in the institutional adoption of digital assets, this trend toward having at least some allocation in crypto is likely to accelerate as institutions try to capture the performance.
Tim Ogilvie, Kraken vice president of Institutional
Texas’ proposal is the first of the major state-level initiatives that can steer us toward future Bitcoin adoption across the US. It’s unknown whether the bill will see any traction. However, it is an important first step in bringing cryptocurrency into mainstream financial and political discussion.
