GET DAILY REPORT FREE
The bitcoin-friendly administration of President Donald Trump and an expanding lobbying effort in statehouses could push states to become more open to crypto and lead public pension funds and treasuries to buy into it.
Proponents of the uniquely volatile commodity argue it is a valuable hedge against inflation, similar to gold.
Many bitcoin enthusiasts and investors are quick to say government-backed currencies are prone to devaluation and increased government buy-ins will stabilize future price swings, giving them more legitimacy and boosting already rising prices.
But the risks are significant. Critics say crypto investments are highly speculative, with so much unknown about projecting future returns. They warn that investors should be prepared to lose money.
Only a couple of public pension funds have invested in cryptocurrency. A U.S. Government Accountability Office study on 401(k) plan investments in crypto, issued late last year, warned it has “uniquely high volatility.” It found no standard approach for projecting the future returns of crypto.
2024 was a landmark year for crypto, with bitcoin surpassing $100,000. The U.S. Securities and Exchange Commission approved the first exchange-traded funds that hold bitcoin. Now, crypto enthusiasts are banking on Trump’s promise to make the United States the “bitcoin superpower” of the world.
Lawmakers in more states can expect to see bills this year to make them crypto-friendly. Analysts say crypto is becoming a powerful lobby. Bitcoin miners are building new installations and venture capitalists are underwriting a growing tech sector that caters to cryptocurrencies.
