The idea of adopting Bitcoin (BTC) at the state level is gaining traction, with Alabama emerging as a potential leader. This follows recent moves by Russian officials to embrace Bitcoin and the re-election of Donald Trump, who has been a strong supporter of a U.S. strategic Bitcoin reserve.
Federal Reserve officials have compared Bitcoin to “digital gold,” highlighting its limited supply of 21 million coins as a key feature. The approval of spot Bitcoin ETFs has further validated Bitcoin’s role in traditional finance, with institutional investors driving significant demand.
Alabama could be the next state to embrace Bitcoin as a strategic reserve. State Auditor Andrew Sorrell advocates for the plan, emphasizing its potential to protect residents from inflation and the economic risks of global de-dollarization.
“A well-balanced portfolio should include exposure to many different types of asset classes. As of now, crypto is a $3 trillion asset class that the state has zero exposure to. It is also the most rapidly growing asset class, with the greatest potential for price appreciation. Investing in Treasuries and bonds certainly has its place, but earning a 4% yield while inflation is 2.7% is barely breaking even,”
Dennis Porter, co-founder of Satoshi Action Fund, noted that state adoption of Bitcoin reserves could worsen the current supply shortage. Bitcoin held on centralized exchanges has dropped to a multi-year low of 2.26 million coins, while demand from institutional investors and whales continues to grow.
The Trump administration is reportedly planning to acquire 1 million Bitcoin over the next five years. Such large purchases could drastically reduce the circulating supply and trigger a prolonged bull market.
Eric Trump, executive vice president of the Trump Organization, recently made a bold prediction: Bitcoin’s price could reach $1 million in the near future. This follows Bitcoin’s historic breakthrough of $100,000, a milestone that has energized the crypto market.
Bitcoin’s role as a hedge against uncertainty grows stronger every day.
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