A comprehensive understanding of the United States' BTC reserves and sovereign wealth funds

Author: Michael Tabone, CoinTelegraph; Translation: Deng Tong, Golden Finance

On February 4th, newly appointed cryptocurrency czar David Sacks stated at a press conference that the bicameral cryptocurrency working group is studying strategic Bitcoin reserves (SBR), and emphasized that the concept of sovereign wealth fund is somewhat different.

In fact, sovereign wealth funds, such as (SWF), are widely understood in the cryptocurrency community and are often mistakenly considered as a tool that can naturally include Bitcoin or other digital assets. SWF is a government-owned investment fund that manages national savings, usually established with surplus revenue from sources such as oil profits or trade income.

Their main goal is to grow and protect wealth over the long term, ensuring economic stability for future generations. Unlike central banks, which focus on managing monetary and monetary policies, sovereign wealth funds take a more strategic approach, investing in real estate, equities, infrastructure and local businesses. **

Essentially, they prioritize stable growth over high-risk investments, making them an important tool for countries seeking to ensure financial security beyond immediate needs. **

The definition of a sovereign wealth fund, as Sacks quickly pointed out, should not be confused with the reason for SBR. The scope of a sovereign wealth fund may be used for broader purposes than specific reserves, including supporting domestic companies and market infrastructure.

23 states have enacted Bitcoin and digital asset legislation. Source: Bitcoin Laws

Bill Hughes, senior legal counsel at blockchain software company Consensys, noted that the concept of a sovereign wealth fund, which was created by order of US President Donald Trump on February 3, could serve as a "second option if a crypto-only strategic reserve cannot succeed."

With the strong momentum of these measures, they raise an important question about the role of cryptocurrencies in national investment strategies and what this means for the broader digital asset industry in 2025 and beyond.

The United States has established state-level sovereign wealth funds and a Bitcoin reserve plan.

A few states have already had sovereign wealth funds that meet the traditional definition of the United States. The Alaska Permanent Fund was established in 1976 to introduce oil revenue into a diversified investment portfolio, supporting state budgets and annual dividends for residents.

The Permanent School Fund of Texas uses revenue from oil and gas to support public education while ensuring financial stability. Similarly, the Permanent Mineral Trust Fund of Wyoming and the Legacy Fund of North Dakota invest in oil, gas, and mineral extraction proceeds to smooth budget fluctuations and preserve wealth for future generations.

The permanent fund of resource tax in New Mexico adopts a similar model, reinvesting the revenue from resource tax on resource extraction to support the fiscal health of the state. Although these funds have different purposes, they share a common goal: transforming temporary resource prosperity into lasting financial security.

If the analyst includes state-managed funds that set aside surpluses (such as emergency funds or stabilization funds), the number will increase. Some of these funds will be invested, sometimes in diversified investment portfolios.

In this way, there are as many as 23 states that have some form of such investment tools. However, their authorization and structure may be different from the 'classic' sovereign wealth fund model.

There are 15 states with separate Bitcoin and digital asset reserve laws. Source: Bitcoin Laws

On the positive side, currently 15 states have introduced legislation on Bitcoin and digital assets. Among these states, Arizona and Utah are currently tied for the lead in terms of legislative votes.

The bill in Arizona proposes the establishment of a strategic Bitcoin reserve fund, capped at 10% of public funds, but on the condition that the US government establishes its own SBR. It aligns with Senator Lummis' Bitcoin bill, which aims to allow states to participate in federally managed programs.

Utah's bill would allow 10% of several major state funds to be invested in digital assets, protect self-custody, and ensure that nodes are not classified as remitters. The Utah bill, which has a broad definition of "digital assets" and does not directly mention Bitcoin, takes a comprehensive approach to integrating cryptocurrencies into state-level investment strategies.

Bill (HB1184) in North Dakota and Act (HB201) in Wyoming both failed to pass their respective state processes.

This is a matter of time, not whether it will happen.

The rapid emergence of Bitcoin and digital asset reserve legislation at the state level marks a fundamental shift in government's view of cryptocurrency as a speculative asset and potential strategic reserve.

Whether these efforts will translate into actual Bitcoin holdings or remain symbolic gestures will depend on political will, regulatory transparency, and market conditions. However, what can be certain is that these attempts have already gone beyond theory.

As states experiment with digital asset reserves and the federal government formulates its own sovereign wealth strategy, the role of Bitcoin in public finance is no longer a question of 'whether' but 'when' and 'how'.