Key Takeaways
- The state of Pennsylvania proposed a new bill to allocate a portion of its treasury to Bitcoin.
- Wyoming senator Cynthia Lummis has also proposed to create a Bitcoin reserve.
- MicroStrategy popularised the use of BTC as a treasury hedging asset.
Pennsylvania introduced a new bill on Thursday in the state’s House of Representatives, proposing to allow the treasury to hold Bitcoin on its balance sheet.
The new proposal comes just days after Donald Trump’s re-election as the 47th president of the United States. Trump rose to victory on the back of a pro-crypto campaign and promises to create a national Bitcoin strategic reserve.
Pennsylvania to Become First U.S. State to Hold Bitcoin Reserve?
If approved, the new legislation proposal would make Pennsylvania the first U.S. state to hold Bitcoin as part of its treasury reserve.
The Pennsylvania Bitcoin Strategic Reserve Act is sponsored by Republican Pennsylvania state Rep. Mike Cabell, who called the proposed legislation a visionary step toward securing the state’s financial future.
If the bill is approved, Pennsylvania’s treasurer can invest up to 10% of the state general fund, state investment fund, and rainy day fund in Bitcoin. The state’s Treasury holds $7 billion in its Rainy Day Fund and over $9.7 billion in its General Fund.
The Bitcoin Strategic Reserve Act was created in association with a Bitcoin advocacy group called Satoshi Action Fund. The advocacy group was also key to the state’s Bitcoin Rights bill, which passed in October.
The rights bill allows Pennsylvania citizens to self-custody digital assets and use Bitcoin as a payment method.
Pennsylvania’s Bitcoin legislation could also pave the way for other U.S. states to adopt a similar BTC strategy. Cynthia Lummis, the Senator from Wyoming, has also called for the state to allocate a part of the treasury to BTC.
Bitcoin’s Treasury Reserve Status is Growing
Bitcoin’s use as a treasury hedging asset was popularized by MicroStrategy, the business intelligence firm that has accumulated over $20 billion worth of BTC over the past four years.
MicroStrategy’s Bitcoin strategy has helped the firm hit a new stock all-time high after 24 years and has also helped it grow its valuation by multiples.
Several other public companies, including Tesla and SpaceX, adopted MicroStrategy’s Bitcoin strategy. In 2024, the likes of Metaplanet joined the BTC reserve race.
Nations With Bitcoin Reserves
In addition to public companies, several nation-states have turned to BTC to manage their financial woes.
Bhutan, a small Asian nation neighboring India, has quietly accumulated over $1 billion in BTC over the past few years. El Salvador, the first country to adopt BTC as a legal tender, also started buying one BTC daily, starting during the last bear market in 2022.
Both Bhutan and El Salvador have seen a massive jump in BTC reserves as the Bitcoin price touched a new all-time high above $93,000.
MicroStrategy, El Salvador, and Bhutan faced criticism and public trolling as their investments turned red during the bear market. However, with the start of the new bull cycle, they have not only wiped their massive losses but also turned profit many times over.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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