A Comprehensive Understanding of Bitcoin Reserves and Sovereign Wealth Funds in the United States

Original Title: "Bitcoin reserves and sovereign wealth funds in the US, explained"

Author: Michael Tabone , CoinTelegraph

Translated by: Deng Tong, Jinse Finance

On February 4, 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 funds is somewhat different."

In fact, sovereign wealth funds (SWF) have been widely understood in the cryptocurrency community and are often mistakenly regarded as tools that can naturally include Bitcoin or other digital assets. SWFs are government-owned investment funds that manage national savings, typically established from surplus revenues such as oil profits or trade earnings.

Their primary goal is long-term growth and wealth protection, ensuring economic stability for future generations. Unlike central banks that focus on managing currency and monetary policy, sovereign wealth funds take a more strategic approach, investing in real estate, stocks, infrastructure, and local businesses.

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

The definition of sovereign wealth funds is why Sacks quickly pointed out that sovereign wealth funds should not be confused with SBRs. The scope of sovereign wealth funds may be used for broader purposes than specific reserves, including supporting domestic companies and market infrastructure.

Bill Hughes, senior legal counsel at blockchain software company Consensys, noted that the concept of sovereign wealth funds was ordered to be created by U.S. President Donald Trump on February 3, which could serve as "a second option if a strategic reserve limited to cryptocurrency fails."

With these initiatives gaining momentum, they raise an important question about the role of cryptocurrency in national-level investment strategies and what this means for the broader digital asset industry in 2025 and beyond.

The U.S. has established state-level sovereign wealth funds and Bitcoin reserve programs

A few states already have sovereign wealth funds that fit this traditional definition in the U.S. The Alaska Permanent Fund, established in 1976, channels oil revenues into a diversified portfolio that supports the state budget and provides annual dividends to residents.

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

New Mexico's Resource Tax Permanent Fund adopts a similar model, reinvesting resource tax revenues from resource extraction to support the state's fiscal health. While the uses of these funds vary, they share a common goal: to convert temporary resource booms into lasting financial security.

If analysts also include state-managed funds that set aside surpluses (such as emergency funds or stabilization funds), this number would increase. Some of these funds do invest, sometimes in diversified portfolios.

As a result, up to 23 states have some form of such investment tools. However, their mandates and structures may differ from the "classic" sovereign wealth fund model.

On the positive side, there are currently 15 states that have at least introduced Bitcoin and digital asset legislation. In the current legislative races in these states, Arizona and Utah are tied for the lead at the parliamentary voting level.

Arizona's bill proposes establishing a strategic Bitcoin reserve fund capped at 10% of public funds, contingent upon the U.S. government establishing its own SBR. It aligns with Senator Lummis's Bitcoin bill, which aims to enable states to participate in a federally managed program.

Utah's bill would allow 10% of several major state funds to be invested in digital assets, protecting self-custody and ensuring that nodes are not classified as remitters. Utah's bill has a broad definition of "digital assets," without directly mentioning Bitcoin, taking a comprehensive approach to integrating cryptocurrency into state-level investment strategies.

North Dakota's bill (HB1184) and Wyoming's bill (HB201) both failed to pass their respective state processes.

It's a matter of time, not if it will happen

The rapid emergence of Bitcoin and digital asset reserve legislation at the state level marks a fundamental shift in government perceptions 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, it is certain that these attempts have moved 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 "if," but rather "when" and "how."