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Nearly 16 years after it was made available to the public, bitcoin is poised for its biggest moments yet in 2025.
Thanks to growing acceptance among regulators, businesspeople and political leaders, the cryptocurrency just reached a major milestone by topping the $100,000 price point for the first time, and it's on the verge of achieving several others.
But while bitcoin’s crossing of that $100,000 threshold has generated a lot buzz, that’s just the tip of the iceberg of what’s happening with the popular digital currency, and in many ways it might not even be the most significant.
Almost a year ago, in early January 2024, the Securities and Exchange Commission approved spot bitcoin exchange-traded funds, or ETFs, creating a brand-new asset class that allows mainstream retail and institutional investors to gain exposure to bitcoin without having to navigate the crypto ecosystem.
Those investors came in droves. The median return for the first 10 funds that invested directly in bitcoin through July 31 was 53.5%. According to the global financial news site FXEmpire, “November was a stellar month for the US BTC-spot ETF market, which had net inflows of $6,681 million, the highest since January 2024’s launch.”
More importantly, however, the SEC’s action seems to have also legitimized bitcoin in the minds of some wary investors and regulators, paving the way for its current momentum.
Meanwhile, during the presidential campaign this year, Donald Trump made several crypto-related promises, including creating a “strategic Bitcoin stockpile.” With his win in November, it’s widely expected that the U.S. government will soon embrace bitcoin and other cryptocurrencies in a way it never has before.
Anticipating this shift, companies like MicroStrategy Inc. have leaned hard into bitcoin. Michael J. Saylor, the co-founder and chairman of the Tysons Corner, Virginia-based software company, has said he will transform the firm into a “Bitcoin Treasury.”
In fact, since Nov. 11, MicroStrategy has purchased more than $13.5 billion in bitcoin. It now holds about $38 billion in the digital currency. Earlier this month, Saylor urged Microsoft to join the “Bitcoin renaissance.”
That’s just at the national level. In statehouses across the country, bitcoin and cryptocurrencies have been hot topics in 2024, and that’s certain to be the case next year too.
According to a National Conference of State Legislatures analysis of LexisNexis® State Net® data, at least 232 bills in 44 states concerning cryptocurrencies and digital assets have been introduced in calendar year 2024.
About a quarter of those bills were adopted or enacted in 2024 and another third are still pending. The proposals, passed, failed and pending, cover a wide array of topics, ranging from regulation of digital asset mining to income taxes to government prohibitions on the use of cryptocurrencies.
Among the most noteworthy of the pending proposals, however, are two that weren’t made public until after NCSL last updated its crypto bill list on Nov. 18—plans in Pennsylvania and Texas to establish state bitcoin reserves.
In the Keystone State, Republican Reps. Mike Cabell and Aaron Kaufer have introduced HB 2664, known as the Strategic Bitcoin Reserve Act, which would allow the state treasurer to invest up to 10% of Pennsylvania’s General Fund, Rainy Day Fund and State Investment Fund in bitcoin and crypto exchange-traded products or ETPs. The bill would permit up to a $970 million investment in bitcoin by the state, which it could use as a hedge against inflation and as a long-term growth asset.
In Texas, meanwhile, Dennis Porter, CEO of the Satoshi Action Fund, a nonprofit advocating for bitcoin mining, said at a blockchain summit in the state that he and his group have had preliminary discussions with a Lone Star lawmaker who is interested in introducing strategic bitcoin legislation.
“The implications of the state of Texas moving forward with strategic Bitcoin reserve legislation cannot be understated,” Porter said, according to Cointelegraph, a website that covers crypto. Texas has the world’s eighth-largest economy with a GDP of $2.4 trillion in 2022, according to the Texas comptroller.
These two announcements came after Wyoming’s junior Republican U.S. Sen. Cynthia Lummis introduced in July of this year SB 4912, known as the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act or the BITCOIN Act, of 2024. Lummis’s bill would create a bitcoin reserve fund for the nation.
The advent of a federal bitcoin reserve or state-based ones could play a major role in ushering in new pro-crypto policies nationwide.
“Perhaps the most obvious effect of the positive momentum and conversations (at both the state and federal level) will be the positive effect on the price of bitcoin, and potentially other crypto assets more broadly,” wrote Sean Stein Smith in Forbes in November. “In 2024 alone the price of bitcoin has jumped from approximately $43,000 from the beginning of January to the almost $100,000 level in November, reflecting both the increased buying powered by institutional acquisition as well as the positive sentiment in the space at large. If either the U.S. federal government or state governments begin purchasing bitcoin at any significant level this will only serve to push the price higher. This development is celebratory for investors and long-term holders of bitcoin, to be sure, but also solidifies another reality of the crypto space.”
Lawmakers in at least 44 states have considered legislation dealing with cryptocurrencies or digital assets this year, according to analysis by the National Conference of State Legislatures. Such measures were enacted in 28 of those states.
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A cryptocurrency reserve, whether at the state or federal level, wouldn’t look all that different from the federal gold reserve at Fort Knox or the oil in our national stockpiles. The government would simply buy a large amount of bitcoin—or any other digital currency—and secure it with a qualified custodian to serve as a safety net in times of economic turmoil.
The country of El Salvador adopted bitcoin as a legal tender in 2021 and bought 200 coins. It has since increased its holdings to 5,942 as of this month, worth about $571 million at current prices. Representatives of the country of Bhutan confirmed in 2024 that it had been mining bitcoin since April 2019 and holds about 12,206 bitcoin.
So, American lawmakers are hardly reinventing the wheel with these new bitcoin reserve proposals. With Trump’s advocacy for crypto, you can expect this to be a topic of wide debate into 2025 and beyond.
—By SNCJ Correspondent BRIAN JOSEPH
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