Strategic Bitcoin Reserve: States Investing, Challenges & Market Impact

Strategic Bitcoin Reserve: State & Federal Legislation, Q2 2025

Washington is flirting with a new kind of war chest: one denominated in satoshis rather than gold. On March 6, 2025, President Trump signed an executive order formally establishing the Strategic Bitcoin Reserve (SRB) and the U.S. Digital Asset Stockpile. Though neither repository has been implemented as of yet, the implications for the future price of Bitcoin as well as altcoins are difficult to overstate.

But that order isn't operating in a vacuum. In Congress, Senate Bill 954 (i.e., the BITCOIN Act) would direct the Treasury and the Fed to accumulate 1 million BTC over five years and hold it for at least two decades. 

What's more, enthusiasm for hoarding Bitcoin is not confined to the U.S. Capitol. States are looking to form reserves as well. 

• In early May, both New Hampshire and Arizona signed digital asset repository bills into law, though the details of their policies differ substantially from each other as well as from the federal SRB. 

• Elsewhere, North Carolina's S.327 authorizes the treasurer to park up to 10% of state funds in Bitcoin, and similar bills have surfaced in Texas, Wyoming, and at least a dozen other legislatures looking for an inflation hedge that doesn't carry gold's storage cost. 

This trend is only going to pick up speed. Let's explore this new major set of features emerging on the crypto asset landscape to get a better handle on what to expect moving forward. 

Strategic Bitcoin Reserve Policies: An Analysis

The presidential executive order mandating the formation of the Strategic Bitcoin Reserve directs federal agencies to retain all seized Bitcoin, whether from criminal proceedings or civil asset forfeitures, rather than liquidating it at auction as has been customary thus far. This directive reframes Bitcoin as a national strategic asset, shifting it from offloaded contraband to held collateral. 

Strategic Bitcoin Reserve: What it Does and Doesn’t Do

The verbiage surrounding market purchasing is notable; the order does allow for direct purchases, but does allow for “accumulating additional coins via market purchases.” The order clarifies that this can only be done if performed in a "budget neutral" way, though that term is undefined. 

Reframing Bitcoin as a strategic asset is particularly interesting; more than likely, it serves as an attempt to get other countries to interpret the asset in the same way, which would drive demand and therefore increase prices for the U.S., which ostensibly would have a head start in accumulating it as a result of these policies and perhaps others in the near future. 

Congress & The Senate

Separately, in Congress, the BITCOIN Act proposes:

• Funding purchases with

  • Seized crypto

  • Fed remittances

  • Balance-sheet "certificate swaps" that mirror the gold-certificate model. 

• Quarterly disclosures

• Public audit trails

• A two-tier custody plan splitting coins between 

  • The New York Fed

  • An outside qualified custodian 

At today's 20 million-coin float, the goal of purchasing 1 million BTC implies locking up roughly 5% of all circulating supply, which means that it's an audacious bid to turn Bitcoin from a rebel asset into something closer to a sovereign insurance policy. 

As far as the implementation plan goes, the BITCOIN Act is far more detailed and realistic than what's included in the executive order, but it faces substantial barriers to being signed into law, specifically the pushback that's likely to stem from spending taxpayer funds on digital assets. 

State Drafts

A wave of study committees in Florida, Utah, and Missouri suggests that the momentum for forming reserves is broader than the headlines imply, though getting bills signed into state law is still uncertain, especially considering the variety of different funding mechanisms. On the surface, several state-level Bitcoin reserve efforts differ from the federal ones. 

• New Hampshire's bill, for example, enables the state treasury to allocate public funds to buying cryptocurrencies with market caps above $500 billion — only Bitcoin fulfills that criteria at the moment — as well as precious metals. 

• Arizona's new law only allows for the proceeds from lost or unclaimed assets to be used for purchasing digital assets. Other states pursue a blend of these approaches, as well as additional accumulation pathways altogether. 

• Bills in Texas (HB 1598, SB 21) and Wyoming (HB 201) copy much of the federal SRB's language but cap exposure at 3–10% of general funds, and allow donations from private citizens, though it's unclear why anyone would have the incentive to donate their coins to their local government. 

Part of what makes the state-level initiatives so significant is that they aren't derivative of federal action but rather are parallel attempts to assert fiscal sovereignty in an increasingly digital financial system. States looking to hedge inflation, diversify their balance sheets, or attract crypto industry investment see Bitcoin reserves as a symbolic and strategic step. 

This is possibly because, in practice, state reserves may serve a different function than a national one. A smaller jurisdiction like Wyoming may view Bitcoin as a tool for economic branding or even as a hedge against federal overreach. Larger states could explore digital asset reserves as part of their long-term endowment strategy. 

Take a look at some of these proposed policies in the table below:

Strategic Bitcoin Reserve: State-Level Legislation

As you can see, there's more than one proposed approach to filling the reserve -- and some states don't even have a clue. Voters are likely to push back at some of the more ambitious proposed policies that would call for using discretionary public funds for buying digital assets. Until there's more clarity, only count on the most-articulated efforts having a shot at becoming law, and even those are not guaranteed to pass. 

Why Policymakers Want a Digital War Chest

There's more than a couple of reasons why having a Bitcoin reserve is appealing to politicians at the state and federal levels. 

• Inflation may be slowing, but price-level shocks since 2020 have left lawmakers acutely aware of currency debasement risk. Bitcoin's correlation with the dollar index hovered near zero through 2024, a rarity among liquid assets. Holding it alongside Treasuries could, in theory, diversify sovereign balance sheets without surrendering liquidity. 

• Technological signaling matters too. Fidelity's 2025 Look-Ahead flags sovereign adoption as Bitcoin's next demand wave, estimating that even a 1% reserve allocation across G7 central banks would absorb another 2 million coins -- and there can only ever be 21 million Bitcoin, so that sum represents a major proportion of the remaining supply. 

• For U.S. lawmakers worried about losing fintech leadership to Asia, a strategic reserve doubles as a financial technology policy billboard.

From Wallet Keys to Congressional Keys: Operational Hurdles

There are a handful of barriers which might stymie Bitcoin reserve policies in the U.S. Custody is the first minefield. Does Washington trust Coinbase or Anchorage, or would it prefer an air-gapped vault inside Fort Knox? BlackRock's recent move to add Anchorage as a secondary Bitcoin custodian shows that institutional multi-sig setups are getting cheaper, but every added signer increases the surface for nation-state hacks.

Regulatory classification of Bitcoin muddies the water even further. 

• The Fed calls Bitcoin a commodity

• Treasury's FinCEN leans toward monetary-instrument treatment for reporting

• The CFTC sees it as both

• The SEC is in the process of reworking its regulations

This patchwork dictates everything from audit cadence to FOIA exposure, both of which imply substantial overhead. 

Transparency requirements present a paradox of sorts. Public blockchains make reserves verifiable in real time. But, agencies like the U.S. Marshals Service cannot even tally what they already hold. These contradictions will need to be resolved, and soon. 

A few of the key implementation headaches are:

• Reconciling multi-sig quorum rules with Federal Acquisition Regulation timelines

• Deciding whether unrealized gains can offset budget deficits under current scoring rules

• Harmonizing state sunshine laws with the need to obfuscate wallet paths during accumulation

And there's a high chance that states might take different approaches to the technical implementation of their reserves, which will complicate the matter further. 

Can the Market Absorb a Million Coins?

In the event that states or the Federal government opt to fill their Bitcoin reserves with market purchases, it'll distort the market promptly and very significantly, not to mention their own balance sheets. 

• At a 100,000-dollar spot price, acquiring 1 million BTC as called for by the BITCOIN Act would cost $100 billion if executed instantly, which is equivalent to about 1.1% of U.S. GDP and is therefore completely unrealistic to expect. 

• On the other hand, spread evenly over five years, the U.S. Treasury would need to buy 550 coins per trading day, which is higher than the daily issuance as of the last halving, after which only 450 coins per day are mined. That daily purchasing volume also equals roughly 6% of daily exchange volume, well inside market-making capacity but still large enough to jolt price action during thin liquidity windows. 

Thus, even a long-term approach isn’t attractive, even if it's a lot more realistic than the aforementioned alternative. In this vein, there are a few market-moving risks to keep a close eye on with regard to Bitcoin reserve policies:

• Sudden executive-order directing a pivot toward a broader crypto basket

• Congressional resistance or economic or financial problems that force the Treasury to liquidate seized coins instead of stockpiling them indefinitely as ordered

• Energy-policy riders that restrict federal entities from buying proof-of-work assets for environmentalist reasons.

For investors, the takeaway is stark. If the BITCOIN Act or any cluster of strategic Bitcoin reserve states actually initiate significant buying, liquidity pressure favors upside skew. But, that very expectation may front-load gains, making purchases expensive and politically fraught. Expect whatever purchasing timetables are proposed to be frontrun. 

Final word

Strategic Bitcoin reserves are neither inevitable nor impossible. They are live experiments in blending monetary policy, energy politics, and cybersecurity at national scale, and, as likely as it is that some are bound to increase wealth, it is probably not the best policy tool for every financial challenge facing states and countries.

The path lawmakers choose in each state will shape Bitcoin's liquidity profile and its credibility as macro collateral for years to come. Don't expect every new policy to have the same impact on the coin's outstanding supply, as the policies vary dramatically in terms of how much new capital will flow into the asset. 

Stay nimble, question the narratives, and remember that sovereign FOMO is only an investment thesis for as long as it's a trend.

Sources:

• https://www.congress.gov/bill/119th-congress/senate-bill/954/text

• https://www.ncleg.gov/Sessions/2025/Bills/Senate/PDF/S327v0.pdf

• https://capitol.texas.gov/tlodocs/89R/billtext/pdf/HB01598I.pdf

• https://www.wyoleg.gov/Legislation/2025/HB0201

• https://www.imf.org/-/media/Files/Publications/WP/2025/English/wpiea2025056-print-pdf.ashx

• https://www.fidelitydigitalassets.com/research-and-insights/2025-look-ahead

• https://www.anchorage.com/insights/anchorage-digital-becomes-newest-digital-asset-service-provider-for-blackrock

• https://www.coindesk.com/policy/2025/02/20/u-s-marshals-service-managing-seized-assets-can-t-say-how-much-crypto-it-holds

• https://www.chainalysis.com/blog/cryptocurrency-asset-seizure/

• https://ccaf.io/cbeci/

• https://digiconomist.net/Bitcoin-energy-consumption/

• https://www.reuters.com/world/us/trump-says-cryptocurrency-strategic-reserve-includes-xrp-sol-ada-2025-03-02/

• https://www.financemagnates.com/trending/why-is-xrp-going-up-ripple-labs-criticized-for-lobbying-against-sbr/

• https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-Bitcoin-reserve-and-united-states-digital-asset-stockpile/

• https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-establishes-the-strategic-Bitcoin-reserve-and-u-s-digital-asset-stockpile/

• https://www.marketwatch.com/story/Bitcoin-falls-in-trumps-first-100-days-frustrating-bulls-looking-for-a-crypto-boom-7b5cec32