Pro-crypto lobbying and a bitcoin-friendly administration may drive state-level policy changes despite volatility concerns.
Crypto Policies on the Horizon
As the pro-bitcoin Trump administration takes office in 2025, states may face a surge in crypto-friendly legislation. Industry lobbying and growing interest in crypto’s role as a hedge against inflation are driving these efforts. Analysts predict public pension funds and state treasuries could be encouraged to adopt cryptocurrencies, signaling a potential shift in traditional investment strategies.
Despite the excitement among bitcoin enthusiasts, critics highlight the risks of such investments, warning that crypto’s volatility and uncertain future returns pose significant challenges for government-backed financial systems.
Rising Lobbying Efforts at the State Level
State legislatures across the U.S. are preparing for an influx of crypto-related bills. Republican Mike Cabell’s bitcoin investment proposal in Pennsylvania sparked significant public interest, even though it failed to pass in 2024. Advocacy groups, such as Satoshi Action, expect similar legislation to emerge in at least 10 states next year.
Meanwhile, federal lawmakers may consider creating a national bitcoin reserve. Sen. Cynthia Lummis is leading efforts to develop a cohesive federal policy that could complement state-level initiatives, further fueling the crypto momentum.
Pension Funds Show Hesitancy
While some states, like Wisconsin and Michigan, have dipped their toes into crypto investments, most public pension funds remain skeptical. Experts like Keith Brainard argue that bitcoin’s short track record and high volatility make it unsuitable for pension boards that prioritize stability and long-term growth.
However, the approval of bitcoin exchange-traded funds (ETFs) and related options by the U.S. Securities and Exchange Commission has made crypto investments more accessible. Major firms like BlackRock and Fidelity now offer bitcoin ETFs, which some pension boards are reportedly exploring.
Local Governments Navigate Crypto Adoption
Innovative steps are being taken at the local level, such as Louisiana allowing residents to pay state agencies in cryptocurrencies. However, officials like Treasurer John Fleming emphasize caution, citing the unpredictable nature of crypto markets.
Even crypto supporters like Jersey City Mayor Steven Fulop advocate for limited exposure, proposing up to 2% of the city’s pension fund for bitcoin ETF shares. Fulop believes such initiatives could pave the way for broader acceptance of crypto in public investments.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
