Author: Michael Tabone, CoinTelegraph; Compiler: Deng Tong, Golden Finance
On February 4, the new cryptocurrency czar David Sacks said at a press conference that the bicameral cryptocurrency working group is studying the Strategic Bitcoin Reserve (SBR), and emphasized that "the concept of a sovereign wealth fund is a little different."
In fact, Sovereign Wealth Funds (SWFs) have been widely understood by the cryptocurrency community and are often mistaken for a tool that can naturally include Bitcoin or other digital assets. SWFs are government-owned investment funds that manage national savings and are usually established by surplus income such as oil profits or trade gains.
Their main goal is to grow and protect wealth in the long term and ensure economic stability for future generations. Unlike central banks, which focus on managing money and monetary policy, SWFs take a more strategic approach, investing in real estate, stocks, infrastructure and local businesses. By their very nature, they prioritize stable growth over risky investments, making them an important tool for countries seeking to ensure financial security beyond their immediate needs. The definition of a SWF is why Sacks is quick to point out that SWFs and SBRs should not be confused. The scope of SWFs may be used for a wider range of purposes than specific reserves, including propping up domestic companies and market infrastructure.
23 states have introduced Bitcoin and digital asset legislation. Source: Bitcoin Laws
Bill Hughes, senior legal counsel at blockchain software company Consensys, pointed out that the concept of a sovereign wealth fund, which was created by order of U.S. President Donald Trump on February 3, could serve as a "second choice if a cryptocurrency-only strategic reserve does not succeed."
As these initiatives gain momentum, they raise important questions about the role of cryptocurrencies in state-level investment strategies and what this means for the broader digital asset industry in 2025 and beyond.
The U.S. Already Has State-Level Sovereign Wealth Funds and Bitcoin Reserve Programs
A handful of states already have sovereign wealth funds that meet this traditional U.S. definition. Established in 1976, the Alaska Permanent Fund channels oil revenues into a diversified portfolio that supports the state budget and annual dividends to residents.
The Texas Permanent School Fund uses oil and gas revenues to finance public education while ensuring financial stability. Similarly, the Wyoming Permanent Mineral Trust Fund and the North Dakota Heritage Fund invest proceeds from oil, gas, and mineral extraction to smooth budget fluctuations and preserve wealth for future generations.
New Mexico’s Resource Tax Permanent Fund follows a similar model, reinvesting resource tax revenues from resource extraction to support the state’s fiscal health. While these funds serve different purposes, they share a common goal: turning a temporary resource boom into lasting financial security.
The number increases if analysts include state-managed funds that set aside surpluses, such as rainy-day or stabilization funds. Some of these funds invest, sometimes in diversified portfolios.
That brings the number of states that have some form of such investment vehicle to 23. However, their mandates and structures may differ from the “classic” sovereign wealth fund model.
15 states have separate Bitcoin and digital asset reserve bills. Source: Bitcoin Laws
On the positive side, 15 states have now introduced at least Bitcoin and digital asset legislation. In the current races in these states, Arizona and Utah are tied for the lead at the legislative vote level.
The Arizona bill proposes the creation of a strategic Bitcoin reserve fund capped at 10% of public funds, but only if the U.S. government establishes its own SBR. It aligns with Senator Lummis’ Bitcoin bill, which seeks to enable 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 nodes are not classified as money transmitters. Utah’s bill, which defines “digital assets” broadly and does not directly mention Bitcoin, takes a comprehensive approach to integrating cryptocurrencies into state-level investment strategies.
Both North Dakota’s bill (HB1184) and Wyoming’s bill (HB201) failed to make it through their respective state processes.
It’s a matter of when, not if
The rapid emergence of Bitcoin and digital asset reserve legislation at the state level signals a fundamental shift in how governments view cryptocurrencies as speculative assets and potential strategic reserves.
Whether these efforts translate into actual Bitcoin holdings or remain symbolic gestures will depend on political will, regulatory clarity, and market conditions. What is certain, however, is that these attempts have moved beyond theory.
As states experiment with digital asset reserves and the federal government develops its own sovereign wealth strategy,the role of Bitcoin in public finance is no longer a question of “if” but “when” and “how.”
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