Dennis Porter, CEO and founder of the Satoshi Act Fund, shared major news on Monday. Through the social media platform X, he announced that Arizona could become the first U.S. state to create a strategic Bitcoin reserve.
The Senate Bill 1025, also known as the Arizona Strategic Bitcoin Reserve Act (SBR), has already been approved.
The state-level adoption of Bitcoin could have a significant impact on its price and inspire other U.S. states to follow suit.
Contents of the Bill
According to the bill, public funds, including Arizona’s state treasury and pension funds, will be able to invest up to 10% of their capital in Bitcoin. In addition to Bitcoin, other cryptocurrencies may also be included in the investment strategy.
The bill also addresses practical aspects, such as the secure storage of these digital assets and ensuring that Arizona retains full autonomy over its Bitcoin reserves.
The bill states:
“If the U.S. Secretary of the Treasury establishes a strategic Bitcoin reserve for storing government-owned Bitcoin, a public fund may store its cryptocurrencies in a separate, secured account within that reserve.”
Arizona Could Invest Nearly $8 Billion in Bitcoin
To understand the scale of this potential investment, it’s important to look at Arizona’s current public funds.
- Arizona manages approximately $28 billion in public funds.
- The state’s pension funds oversee an additional $50 billion.
If both funds allocate 10% of their capital into Bitcoin, it would result in a total investment of approximately $7.8 billion.
Impact on Bitcoin’s Price
An investment of this magnitude could significantly impact Bitcoin’s price.
- With Bitcoin’s current market capitalization exceeding $2 trillion, a $7.8 billion investment could increase Bitcoin’s price by an estimated 3-5%.
- The strategic adoption of Bitcoin by a U.S. state would send a strong signal, further boosting investor confidence in cryptocurrency, which could have a long-term positive effect on BTC’s price.
Since state funds typically follow long-term investment strategies, this move could not only reduce Bitcoin’s volatility but also contribute to its broader adoption as a legitimate asset class.
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