When Bitcoin launched in 2009, few could have predicted that it would one day reach its historic $100K valuation or be considered for national reserves.
Yet today, major institutional investors like MicroStrategy are expanding their Bitcoin holdings, and political leaders — including President Donald Trump — are adopting a more pro-Bitcoin stance. Regulatory discussions are also gaining momentum.
One of the most significant developments is the introduction of the Bitcoin Strategic Reserve Bill, which directs the U.S. Treasury to establish a Federal Bitcoin Reserve. The bill seeks to integrate Bitcoin into the U.S. financial system by establishing a national BTC stockpile as a long-term strategic asset.
Here, we’ll break down the BITCOIN Act of 2024, its key provisions, and how a Bitcoin reserve could impact the U.S. economy and beyond.
Introduced in 2024 by pro-crypto Republican Senator Cynthia Lummis, the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024 — or the BITCOIN Act — proposes the creation of a Strategic Bitcoin Reserve to ensure the efficient and transparent management of the Federal Government‘s BTC holdings.
Here are the key takeaways from the bill:
The BITCOIN Act directs the U.S. Treasury to purchase and hold 200,000 BTC annually for five years, creating a strategic reserve of one million BTC tokens. The Trump administration argues that integrating Bitcoin into the country’s financial reserves could help reduce the $36 trillion national debt, strengthen financial stability, and hedge against inflation — ultimately bolstering the U.S. dollar’s standing in international markets.
The Act not only directs the purchase of BTC but also mandates that all acquired tokens be securely held for a minimum of 20 years unless they’re used to help settle outstanding federal debt.
The bill directs the U.S. Treasury to create a federal reserve dedicated to securely storing all acquired BTC. This reserve will consist of a decentralized network of secure storage facilities.
The Act allows individual states to store their BTC holdings within the federally managed reserve under segregated accounts, providing a secure option for state-level Bitcoin reserves.
To expand national Bitcoin holdings in the U.S., the Act mandates that the Federal Reserve allocate a portion of its net earnings toward Bitcoin purchases. It also proposes that banks reduce their excess dollar reserves to facilitate this.
Several legislative initiatives are supporting the establishment of a Strategic Bitcoin Reserve, including:
Fulfilling his pre-inauguration promises, President Trump has issued a pro-crypto executive order to create a national digital asset stockpile, which is expected to include BTC and other cryptocurrencies and tokens.
The order mandates the formation of a “Working Group on Digital Asset Markets,” led by White House AI and Crypto Czar David Sacks and the chair of the U.S. Securities and Exchange Commission (SEC). If approved by Congress, the group will develop a more defined and business-friendly regulatory framework for crypto and stablecoins while overseeing the establishment of the digital asset stockpile.
If successfully implemented, this stockpile could serve as a hedge against economic instability and inflation by diversifying national assets, protecting the U.S. financial system. Additionally, it may foster innovation and drive crypto market stability, potentially attracting more institutional investors into the digital asset space.
Senator Cynthia Lummis, who introduced the BITCOIN Act of 2024, has been appointed chair of the Senate Banking Subcommittee on Digital Assets, a division of the Senate Banking Committee focused on cryptocurrency regulation and financial innovation.
This position strengthens Lummis’ role as a key advocate for integrating Bitcoin into national reserves and shaping financial policy. She’ll be actively involved in drafting legislation for digital assets while overseeing the operations of federal financial regulators — including the SEC and the Federal Deposit Insurance Corporation (FDIC) — to ensure their policies don’t stifle crypto innovation.
By overseeing federal regulators, Lummis could help prevent measures like the Biden Administration’s Operation Choke Point 2.0, which allegedly restricted crypto firms from accessing the banking system.
Arizona and Utah may be some of the first states to introduce Bitcoin as part of their public portfolios.
The Arizona Senate Finance Committee approved the Strategic Reserve Bitcoin Act, which, if passed by the House of Representatives and signed by the Governor, would allow the state to allocate 10% of its public funds to BTC and other digital assets. The bill also proposes securing these assets in a segregated account within the Federal Strategic Bitcoin Reserve, signaling the state’s support for the BITCOIN Act.
Utah is also advancing crypto investments. In January 2025, State Rep. Jordan Teuscher introduced the Blockchain and Digital Innovation Amendments Bill to the House Economic Development and Workforce Services Committee.
The committee voted to allocate 5% of state funds to stablecoins, non-fungible tokens (NFTs), and other high-liquidity digital assets with regulatory approval and a significant market cap. If passed by legislators and signed by Governor Spencer Cox, Utah could implement the bill as early as May 2025, positioning the state as a leader in crypto investment.
While Arizona and Utah have made headlines with their pro-crypto bills, they aren’t the only states considering Bitcoin as a strategic financial asset. Several other states have introduced similar legislation, including:
Additionally, other states — including Florida, Missouri, Kentucky, South Dakota, Maryland, New Mexico, and Iowa — have pending digital asset bills, reflecting a growing national trend toward Bitcoin reserves.
A Bitcoin strategic reserve could offer several advantages for both the U.S. economy and the broader cryptocurrency landscape. These include:
Holding Bitcoin alongside traditional reserves helps diversify national financial assets. This reduces reliance on centralized monetary policies and provides a hedge against risks such as currency devaluation and economic instability.
Bitcoin is a deflationary asset with a fixed supply of 21 million BTC. Its scarcity may drive long-term value appreciation, making it a potential hedge against inflationary pressures affecting fiat currencies.
The Strategic Bitcoin Reserve bills in the U.S. signal federal and state recognition of Bitcoin as a legitimate asset. This could increase confidence among institutional investors and encourage broader crypto adoption.
It could also inspire policymakers in other jurisdictions to establish their own Bitcoin reserves, boosting global crypto adoption. Nations like Japan, the Czech Republic, Poland, Germany, and Hong Kong have already hinted at creating BTC stockpiles, highlighting the proposed U.S. reserve as a model.
The BITCOIN Act of 2024, along with President Trump’s executive order for a “National Digital Asset Stockpile” and various state BTC reserve bills, could reshape the U.S. economy and the broader crypto landscape. These initiatives could help protect the U.S. from inflation risks and drive institutional interest in crypto assets worldwide.
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