Overview

Bitcoin (BTC) is increasingly considered a reserve asset, particularly amid rising global economic uncertainty. More nations, corporations, and institutions are exploring its potential role in financial reserves.

While regulatory concerns, price volatility, and technological limitations remain challenges, BTC’s decentralized and inflation-resistant nature positions it as a compelling strategic reserve option for the future.

What is Bitcoin Strategic Reserve?

At the Bitcoin2024 Conference held in July 2024, Donald Trump explicitly pledged in his speech to “never sell” the Bitcoin held by the government or any BTC acquired in the future, emphasizing the concept of a “Strategic Bitcoin Reserve.”

Source: aljazeera

On July 31, 2024, Wyoming Senator Cynthia Lummis introduced the “U.S. Bitcoin Strategic Reserve Act”, proposing to accumulate 1 million BTC (5% of total supply) over the next five years through tax revenues, fees, and donations as a strategic reserve, with a minimum holding period of 20 years. The act stipulates that any proceeds from BTC sales must be reinvested into acquiring more Bitcoin or used to repay federal debt. This legislation aims to strengthen the U.S.’s leadership in financial innovation and serve as a hedge against economic fluctuations. It is currently under review by the Senate Banking Committee and may be signed into law by President Trump.

Source: lummis.senate.gov

Development History

Early Stage: The Beginnings of Private and Corporate Reserves

The concept of BTC as a reserve asset was initially driven by private investors and corporations. In the 2010s, as BTC’s price surged from mere cents to thousands of dollars, early adopters began viewing it as “digital gold”—an asset to hedge against risks in the traditional financial system.

The Beginning of Corporate Bitcoin Reserves

In 2020, publicly listed company MicroStrategy became the first to incorporate BTC into its corporate treasury, investing hundreds of millions of dollars. This marked a major milestone in BTC’s evolution as a reserve asset. Following this, Tesla and Square (now Block) also joined the trend, driving corporate BTC holdings beyond 200,000 BTC at one point.

Institutional Acceleration and Entry of Financial Giants

Meanwhile, traditional financial institutions gradually began accepting BTC as a new asset class. Global asset management giants BlackRock and Fidelity launched BTC-related investment products, providing institutional investors with channels to allocate BTC in their portfolios. These initiatives signal that BTC’s institutionalization as a reserve asset is accelerating and gradually integrating into the global financial system.

Source: bitcointreasuries

Turning Point: National-Level Exploration

In 2021, El Salvador became the first country to adopt BTC as legal tender and started accumulating national reserves through market purchases and geothermal mining. As of February 25, 2025, the country holds 6,088 BTC, valued at $535 million. While this did not immediately trigger large-scale adoption, it set a precedent for other nations, with some emerging markets considering BTC as part of their foreign exchange reserves.

In 2024, Wyoming Senator Cynthia Lummis introduced the Strategic Bitcoin Reserve (SBR) Plan, proposing accumulating 1 million BTC over 20 years to hedge against debt risks. Initially controversial, discussions on BTC as a national reserve asset gained traction amid inflation concerns and USD volatility. Meanwhile, Wyoming and Texas have started exploring BTC reserves, laying the groundwork for potential future policy shifts.

Source: bitcointreasuries.net

Current Progress: The U.S. Taking the Lead

As of February 2025, the United States has emerged as the primary driver of BTC reserves. At the 2024 Bitcoin Conference, Donald Trump publicly endorsed BTC. After winning the November election, he signed an executive order directing the Treasury and Commerce Departments to submit a sovereign wealth fund proposal within 90 days, considering BTC as a potential investment asset.

Policy and Market Synergy Accelerating Bitcoin Institutionalization

High-level government appointments have further accelerated Bitcoin’s institutionalization. Treasury Secretary nominee Scott Bessent has emphasized BTC’s role as a hedge against inflation, while Commerce Secretary nominee Howard Lutnick has described it as a scarce, high-value asset. At the same time, 23 U.S. states have introduced digital asset regulations, with 15 states actively exploring Bitcoin reserves. Arizona has proposed creating a state-managed Bitcoin reserve fund, while Texas, capitalizing on its energy resources, has become a key hub for Bitcoin mining and accumulation.

These policy shifts align with market trends, further driving government involvement. By the end of 2024, Bitcoin’s price surged past $100,000, institutional adoption increased, and a growing concentration of supply reinforced its status as a strategic national asset.

Source: bitcoinlaws.io

Bitcoin Reserve Progress Across U.S. States

Federal and State Government Bitcoin Reserve Developments

As of early 2025, the U.S. federal government has yet to establish a Bitcoin reserve policy. However, individual states have taken the lead in exploring ways to integrate Bitcoin into their fiscal systems.

Currently, 26 states have proposed Bitcoin reserve-related legislation, including Arizona, Illinois, Kentucky, Maryland, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, and Texas.

Source: bitcoinreservemonitor.com

These proposed bills generally fall into three main categories:

1. Creating a Strategic Bitcoin Reserve (SBR): Several states are exploring holding Bitcoin in their treasury to hedge against inflation and diversify government assets.
2. Allowing Bitcoin for Government Payments: Some states are considering legislation to allow Bitcoin for tax payments and administrative fees.
3. Developing a Comprehensive Digital Asset Regulatory Framework: These bills aim to provide legal clarity and a structured regulatory environment for Bitcoin and other cryptocurrencies, ensuring their legitimacy and smoother integration into the state’s financial system.

Source: bitcoinreservemonitor

Key U.S. States Advancing Bitcoin Reserve Legislation

Pennsylvania

Legislative Proposal:
The Pennsylvania Strategic Bitcoin Reserve Act was introduced in November 2024 by Representatives Mike Cabell and Aaron Kaufer. It proposes allowing the state treasurer to invest up to 10% of state funds (including the General Fund, Rainy Day Fund, and Investment Fund, totaling approximately $7 billion) in Bitcoin or related exchange-traded products (ETPs) as an inflation hedge.

Progress:
This was the first state-level BTC reserve proposal in the U.S. However, after both sponsors lost in the November 2024 primary elections, the bill lost its key advocates.
It is currently under review in the House but is considered “dead in the water” due to its lack of active support.

Status: Stalled. Unless new lawmakers take over, its chances of passing are extremely low.

Source: fastdemocracy.com

Texas

Legislative Proposal:

• HB 1598: Introduced by Representative Giovanni Capriglione on December 12, 2024, this bill proposes establishing a “Texas Strategic Bitcoin Reserve” funded through taxes, fees, and voluntary contributions. The bill does not allow direct state fund purchases and mandates a minimum holding period of five years.
• SB 778: Introduced by Senator Charles Schwertner on January 16, 2025, this bill also proposes a BTC reserve, allowing Bitcoin purchases through state appropriations and requiring periodic transparency reports.

Progress:
Both bills are being discussed in the 89th Legislative Session, which began on January 14, 2025. SB 778 has a higher chance of progressing since Lieutenant Governor Dan Patrick has listed it as a priority.
Given Texas’s mining advantage and Republican-led political environment, the proposal has substantial support.

Status: SB 778 is more promising and could be decided as early as March 2025, potentially making Texas the first state to implement a BTC reserve.

Source: capitol.texas.gov

Utah

Legislative Proposal:

• HB 230 (Blockchain and Digital Innovation Amendments): Introduced by Representative Jordan Teuscher on January 20, 2025, the bill allows the state treasurer to invest up to 10% of state funds in eligible digital assets (with a market capitalization of over $500 billion—currently, only BTC qualifies).
• The bill also includes staking and lending provisions, requiring third-party custody solutions to ensure state ownership of assets.

Progress:

• On January 28, 2025, Utah’s House Committee passed the bill 8-1, and it has now moved to the Senate for review.
• Utah has had a Digital Asset Task Force since 2022, laying the groundwork for such legislation. It is considered one of the most advanced states in BTC reserve adoption.

Status: Leading progress. Expected to pass before the spring 2025 legislative session ends, possibly making Utah the first U.S. state with a BTC reserve.

Source: le.utah.gov

Source: fastdemocracy.com

Wyoming

Legislative Proposal:

• HB 0201 (State Funds – Bitcoin Investment Act): Introduced by Representative Jacob Wasserburger on January 17, 2025, this bill aims to establish a “Strategic Bitcoin Reserve.” The bill permits the state treasurer to allocate a portion of the General Fund, Wyoming Permanent Mineral Trust Fund, and Permanent Land Fund (each capped at 3%) into BTC.
• The bill mandates secure custody solutions (such as cold storage) and allows BTC holdings to exceed the 3% cap without forced liquidation, demonstrating a long-term investment strategy.
• Senator Cynthia Lummis supports it, calling it a “pioneering financial innovation” that aligns with her push for federal BTC reserves.

Progress:

• The bill is under committee review in the Wyoming legislature and is expected to be voted on in the spring 2025 legislative session.
• Wyoming has led blockchain and cryptocurrency legislation since 2018, with over 20 related laws passed. Given its Republican-dominated political environment, the bill has a high chance of passing.

Status: Strong momentum. If passed, Wyoming could be one of the first states to establish a BTC reserve.

Source: wyoleg.gov

Arizona

Legislative Proposal:

• SB 1025 (Strategic Bitcoin Reserve Act): Proposed as of February 25, 2025, by Senator Wendy Rogers and Representative Jeff Weninger, this bill authorizes the state treasurer and public funds (including pension systems) to invest up to 10% of assets in BTC and other virtual currencies.
• The goal is to diversify reserves, hedge against inflation, and promote digital economic innovation. If the federal government establishes a BTC reserve, Arizona’s BTC holdings would be stored in a federally designated account. The bill mandates secure storage solutions (such as cold storage).

Progress:

• On January 27, 2025, the bill passed the Arizona Senate Finance Committee 5-2 and has now moved to the Senate Rules Committee for final review and amendments.
• The next step is a full Senate vote. If passed, it will move to the House for further approval and require the governor’s signature to become law. A decision is expected between March and April 2025.
• Arizona has a strong blockchain foundation, and the proposal’s backing from the pro-crypto Trump administration accelerates its progress.

Status: In a critical Senate review stage, with a high likelihood of passing. If successful, Arizona may become the first U.S. state to officially adopt a BTC reserve, potentially influencing others to follow suit.

Source: fastdemocracy.com

Montana

Legislative Proposal:

• HB 429 (House Bill No. 429): Introduced by Representative Curtis Schomer on January 2025, this bill sought to create a “Special State Revenue Account” allowing up to $50 million to be invested in BTC, precious metals, and stablecoins as part of the state’s reserves.
• The investment criteria required assets to have an average market capitalization of over $750 billion in the previous year (only BTC qualifies). The Montana Investment Board would manage the funds to diversify state assets and hedge against inflation.
• Some Republican lawmakers, including Lee Demming, supported it, arguing it would improve taxpayer returns.

Progress:

• On February 19, 2025, the Montana House Business & Labor Committee approved the bill 12-8, with full Republican support but unanimous Democratic opposition.
• However, on February 22, 2025, the full House rejected the bill 41-59, with some Republicans also voting against it, citing BTC’s volatility as a concern for taxpayer funds.
• Opponents like Steven Kelly argued that public funds should be safeguarded and deemed BTC too risky.

Status: The proposal has officially failed. Montana joins North Dakota, Wyoming, and Pennsylvania as states that have rejected BTC reserve bills. However, other states like Utah and Arizona continue advancing similar legislation, highlighting contrasting approaches to BTC reserves.

Source: legiscan.com

Comparison of Central Bank Attitudes Toward Bitcoin Reserves

Currently, global perspectives on Bitcoin (BTC) as a reserve asset vary significantly.

El Salvador has officially adopted BTC as legal tender and continues to accumulate it, while Bhutan’s central bank indirectly holds BTC through investments in mining. The Czech Republic plans to allocate a portion of its foreign exchange reserves to BTC, and Argentina, under its new government, has taken a more open stance on BTC, potentially following a similar path in the future. The United States is advancing BTC reserve legislation, while Canada has not explicitly adopted BTC as a reserve asset but occasionally holds and auctions confiscated BTC through government agencies.

In contrast, China, India, France, and the United Kingdom do not hold BTC in their central bank reserves and prefer strict regulations while promoting their own central bank digital currencies (CBDCs).

Countries like Switzerland, Singapore, and the UAE (Dubai) do not hold BTC as reserves but encourage its use as a financial asset for investment and trading. Meanwhile, Russia has not officially acknowledged holding BTC but may be secretly accumulating it.

Overall, the trend of BTC as a national reserve asset is still in its early stages—some countries are experimenting with adoption, while most developed nations remain cautious, prioritizing regulatory oversight.

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Driving Factors

1. Economic Motivation: Hedging Against Inflation and Pressure from U.S. Dollar Hegemony

As “digital gold,” BTC has a fixed supply of 21 million coins, which makes it inflation-resistant.

The global de-dollarization trend is pushing countries to seek diversified reserves to hedge against economic risks.

The U.S. national debt has surpassed $35 trillion, and some believe BTC could help alleviate the debt burden (though implementation is complex).

2. Political Support: The Stance of Policymakers

Trump and Senator Cynthia Lummis support BTC reserves.

Lummis proposed the “Bitcoin Act,” which suggests purchasing 1 million BTC (5% of the total supply) within five years.

Policy direction is key—pro-crypto leaders (like Trump) may accelerate adoption, while opponents may slow down the process.

3. Legal and Regulatory Framework: Institutional Foundations Being Built

On January 23, 2025, U.S. President Donald Trump announced the establishment of a cryptocurrency task force to develop a new digital asset regulatory framework and explore the creation of a national cryptocurrency reserve. The order protects citizens’ rights to freely use public blockchains, including transactions, mining, validation, and self-custody of digital assets.

Source: whitehouse.gov

4. Market Maturity

Institutional Adoption: Spot Bitcoin ETFs generated $35.2 billion in revenue in 2024. In January 2025 alone, they raised $4.94 billion, with full-year projections of $59 billion. Institutional holdings are increasing—as of February 25, 2025, MicroStrategy holds 478,000 BTC, laying a market foundation for government reserves.

Source: bitcointreasuries.net

Price Stability: BTC’s market cap exceeds $2 trillion, and while volatility still exists, it has decreased compared to early years. The long-term upward trend (BTC surpassing $100,000 in 2025) enhances its appeal as a reserve asset.

Source: x

5. Geopolitical Competition: Global Rivalry and Financial Dominance

If the U.S. leads in establishing BTC reserves, it could force China, Russia, and the EU to follow, triggering a “Bitcoin arms race.” Seizing the initiative could solidify U.S. dominance in digital finance, while failing to act could weaken its global influence.

Opposing Factors

1. Economic and Financial Risks

Price Volatility: BTC experiences extreme price fluctuations (e.g., a 10% drop in a single day in November 2024), making it unsuitable as a stable reserve asset. Opponents, such as Montana Representative Steven Kelly, worry that BTC could negatively impact state or national balance sheets.

Lack of Intrinsic Value: Traditional economists, such as Nobel laureate Paul Krugman, criticize BTC for lacking real economic backing and being purely driven by market confidence, unlike gold or fiat currency.

Opportunity Cost: BTC investment may limit government spending on infrastructure, education, and other priorities. For instance, some Arizona lawmakers question why BTC should take precedence over state pension investments.

2. Political and Public Resistance

Partisan Divide: In the U.S., BTC reserve proposals are primarily driven by Republicans (e.g., Texas SB 778), while Democrats generally remain skeptical. For example, Montana’s HB 429 failed due to unanimous Democratic opposition, highlighting the risk of legislative deadlock.

Public Awareness Gap: While BTC adoption is increasing, many taxpayers still view it as a speculative asset rather than a reliable reserve. A 2024 Pew Research poll found that only 31% of Americans support government BTC holdings.

Opposition from Financial Institutions: Traditional finance entities (such as banks and Wall Street) may resist BTC due to its decentralized nature, threatening their influence. Federal Reserve officials have openly opposed BTC reserves, citing concerns over U.S. dollar dominance.

Source: x

3. Legal and Regulatory Challenges

Unclear Legal Framework: BTC’s status remains undefined in many states and countries—is it a currency or a commodity? This uncertainty complicates its inclusion as a reserve asset.

While Trump signed an executive order on January 23, 2025, whether Congress will pass supporting legislation remains unclear. If Republicans and Democrats remain divided, future regulatory frameworks could face uncertainty.

4. Operational and Technical Risks

Security Risks: Although BTC’s blockchain is secure, holding large reserves requires cold storage and custody solutions. If private keys are lost or stolen, recovery is impossible, raising concerns about BTC’s reliability as a reserve asset.

Technical Complexity: Managing BTC reserves demands specialized knowledge, which government agencies may lack. For example, Pennsylvania’s proposal stalled due to the absence of a concrete operational plan.

Liquidity Constraints: While BTC’s market depth has improved, large-scale liquidations could trigger price crashes, limiting its function as an emergency reserve compared to traditional assets like gold.

Recent Security Incidents:

• On February 21, 2025, Bybit suffered a $1.5 billion ETH hack.
• On February 24, 2025, Infini, a stablecoin-focused digital bank, was hacked for $49.5 million.

These attacks highlight security risks in the crypto space, raising concerns about BTC reserves for governments.

Suppose governments were to adopt BTC as a strategic reserve. In that case, they must avoid storing it on centralized exchanges and instead use multi-signature cold wallets, MPC wallets, or HSM security solutions.

Distributed storage and multi-country custody could reduce single-point risks, while techniques such as Shamir’s Secret Sharing could enhance security. Exchange hacks often cause market turbulence—governments must implement robust BTC reserve management strategies to protect against cyberattacks and market shocks.

Source: x

5. Philosophical and Cultural Conflicts

Decentralization Paradox: BTC is built on decentralization and censorship resistance, yet placing it in government reserves contradicts its core principles. BTC core developer Jimmy Song once stated: “Government holding BTC is a betrayal of its philosophy.”

Traditional Asset Dependence: Policymakers favor familiar assets like gold and fiat currencies, viewing BTC as a “novelty”. For example, North Dakota lawmakers rejected BTC reserves, citing gold as a more secure option.

Real-World Cases Reflecting Opposition

Montana: HB 429 was rejected due to volatility and taxpayer risk concerns.

Pennsylvania: Proposal stalled due to lack of legislative momentum after key proponents lost reelection.

Federal Level: Federal Reserve Chair Jerome Powell stated that BTC “will never replace the U.S. dollar,” reflecting high-level institutional resistance.

Source: x

Future Outlook

1. Optimistic Scenario: BTC Becomes a Mainstream Reserve Asset

Conditions:

• The U.S. federal government passes a BTC reserve bill (such as Lummis’ BITCOIN Act) to hold 1 million BTC, approximately 5% of the total supply.
• 10-15 countries globally follow El Salvador’s lead, establishing BTC reserves, driving it to become a “secondary reserve asset.”
• BTC’s price stabilizes in the $200,000-$500,000 range, and volatility is reduced to levels comparable to gold (annualized volatility of around 15%).

Outcome:

• BTC stands alongside gold and the U.S. dollar as one of the top three global reserve assets, with a global reserve share of 5%-10% (currently gold holds around 22%).
• Blockchain technology is further integrated into the financial system, improving transparency and cross-border payment efficiency.

Driving Factors: Trump administration’s pro-crypto policies, continued decline of the dollar’s dominance, BTC halving cycle (2028) boosting scarcity.

2. Neutral Scenario: Limited Adoption, Regionalized Reserves

Conditions:

• Some states (such as Texas and Utah) successfully implement BTC reserves, but at the federal level, there are obstacles, and the total holdings are limited to hundreds of thousands of BTC. A few countries (such as small nations or resource-based economies) adopt BTC, while major countries (such as China, the EU) refuse due to regulatory concerns or competition.
• BTC price fluctuates between $100,000 and $300,000, with increased market acceptance but not yet mainstream adoption.

Outcome:

• BTC becomes a “complementary reserve,” similar to Special Drawing Rights (SDR), accounting for 1%-3% of global reserves.
• State and federal policies in the U.S. diverge, with BTC reserves becoming a localized economic experiment.

Driving Factors: State-level legislative breakthroughs, continued growth in institutional holdings, improved public awareness.

3. Pessimistic Scenario: Marginalized or Restricted

Conditions:

• The Federal Reserve and major central banks jointly resist BTC (e.g., Powell’s “BTC will never replace the dollar” stance continues) and launch powerful CBDCs (central bank digital currencies) to suppress BTC.
• BTC loses appeal due to tightening regulation (e.g., U.S. comprehensive taxation, EU banning anonymous transactions), with prices staying below $100,000 for an extended period.
• Technological replacement (e.g., quantum computing threatening SHA-256 algorithms) undermines confidence.

Outcome:

• BTC becomes a niche speculative asset, with reserve attempts (such as Montana’s rejection) frequently failing, limited to a few radical nations holding it.
• Global reserves remain dominated by the U.S. dollar (60%), the euro (20%), and gold, with BTC’s share under 0.5%.

Driving Factors: Strong regulation, backlash from traditional finance, exposure to technological risks.

Investment Recommendations for Individual Investors

1. Asset Allocation: Follow Trends and Diversify Risk

Long-term Holding (HODL): If more countries include BTC in their reserves, its long-term value may continue to rise. Individual investors can consider purchasing BTC in installments to reduce costs.

Portfolio Diversification: Since BTC is highly volatile, it can complement assets like gold, stocks, and bonds to optimize an investment portfolio.

Decentralized Storage: With increasing government regulations, cold wallets (such as Ledger, Trezor) should be used to store BTC to avoid risks associated with centralized exchanges (CEX).

2. Monitor Policy Changes to Avoid Compliance Risks

Taxes & Regulations: Different countries impose varying tax policies on BTC, such as capital gains tax or VAT. Holders should research local laws to avoid legal risks.

Choosing Exchanges: Use compliant trading platforms to ensure fund security while staying alert to possible government restrictions (e.g., exchange bans, withdrawal limits).

3. Leverage the BTC Ecosystem for Asset Growth

DeFi & Staking: Some platforms allow BTC as collateral to earn yields (e.g., WBTC on Ethereum). Investors should evaluate risks before participating.

Lightning Network: If BTC is widely adopted as a reserve asset, its payment infrastructure may improve. Investors can explore and participate in Lightning Network transactions with lower fees.

4. Monitor Global Trends and Position Early

Emerging Markets: Countries like Argentina and El Salvador actively push BTC adoption, presenting potential investment, employment, or business opportunities.

Web3 & BTC Integration: New application scenarios may emerge as BTC’s ecosystem expands (Ordinals inscriptions, BTC Layer2 solutions like Stacks). Investors can position early.

5. Mitigate Risks and Prepare for Contingencies

Potential Government Crackdowns: Some countries (China, India) may impose stricter crypto regulations. Investors should consider diversifying assets across multiple regions.

Geopolitical Risks: Countries may use BTC to counter financial sanctions, leading to increased market volatility. Investors should stay informed on global economic trends and adjust strategies accordingly.

As more countries consider adding BTC to their reserves, individual investors should rationally assess the trend, optimize asset allocation, and remain compliant with regulations. Whether BTC becomes a mainstream reserve asset or not, its scarcity and decentralization could still offer long-term value. A balanced holding strategy with flexible adjustments remains the most prudent approach.

Conclusion

From personal wallets to corporate treasuries and now national reserves, BTC’s journey reflects the broader rise of digital assets. The U.S. is currently leading the charge, injecting new momentum into BTC’s adoption, but whether it succeeds remains to be seen. This transition is not just a merging of technology and economics—it is a litmus test for the global balance of power. The history of BTC as a reserve asset is still being written, and policy, market forces, and societal acceptance will determine its final chapter.

The U.S. states’ exploration of Bitcoin purchases and legislation serves as both an expression of local governance and an early experiment in digital asset integration. From Pennsylvania’s pioneering attempt to Montana’s setbacks, state-level efforts vary, yet the broader trend suggests BTC is moving from the fringes to the mainstream. This shift is not just about BTC’s trajectory—it could reshape the financial strategies of the U.S. and the global economy. The fate of state-level BTC legislation will be closely watched in the coming months.