The Pennsylvania House of Representatives introduced a bill to establish a Bitcoin Strategic Reserve aimed at diversifying the state treasury's investments.
Why Bitcoin? Hedge Against Inflation and Diversification
The proposal emphasizes Bitcoin's role as a 'financial hedge'. Rep. Mike Cabell argues that Bitcoin offers protection from economic instability, particularly in times of inflation. By diversifying assets, the state can capitalize on Bitcoin's growth while mitigating long-term inflation effects. Cabell noted major financial institutions like BlackRock and Fidelity now offer Bitcoin options.
Broader Political Support
Pro-crypto advocates like Senator Cynthia Lummis from Wyoming have also introduced federal bills encouraging government entities to hold Bitcoin. Recently, Pennsylvania passed a Bitcoin Rights Bill, safeguarding citizens' rights to self-custody digital assets.
Impact on Bitcoin’s Market
The introduction of Pennsylvania’s bill coincides with a surge in Bitcoin’s price following Trump’s election victory. Optimism about his crypto-friendly policies has driven Bitcoin's price to record highs, with a market cap exceeding $1.72 trillion.
If passed, Pennsylvania will be the first U.S. state to directly incorporate Bitcoin into its reserves, potentially influencing financial policies of other states.
