Alabama State Auditor Andrew Sorrell has publicly proposed the establishment of a Strategic bitcoin Reserve (SBR). Sorrell's call comes amid a growing wave of interest in SBRs among policymakers at the federal and state levels, as well as a sharp rise in the price of btc following the election of President-elect Donald Trump, who made campaign on pro-bitcoin policies.
talking to <a target="_blank" href="https://1819news.com/news/item/state-auditor-sorrell-calls-for-alabama-strategic-bitcoin-reserve-the-debate-over-whether-crypto-will-succeed-has-ended” rel=”nofollow noopener” target=”_blank”>1819 NewsSorrell emphasized what he sees as the inevitability of the long-term success of bitcoin and cryptocurrencies: “The debate about whether cryptocurrencies will succeed is over.” He further underlined the value of digital assets in expanding state portfolios: “As of now, cryptocurrencies are a $3 trillion asset class to which the state has no exposure. “It is also the fastest growing asset class (…) with the greatest potential for price appreciation.”
Is Alabama Next to Draft a bitcoin Strategic Reserve Bill?
According to Sorrell, establishing an SBR would serve three main objectives: portfolio diversification, cryptocurrency-friendly positioning, and protection against currency-related risks. “What happens if the dollar stops being the world's reserve currency?” Sorrell asked. “What happens if inflation reaches 8% again? (…) The value of bitcoin is not affected by what happens to the US dollar (…) It would strengthen the balance sheet of our state and could be used as collateral for future debt issues.”
Sorrell's initiative closely follows national and federal developments. President-elect Trump's stated intention to create a “national bitcoin reserve” has become more tangible following a 50% rise in the price of btc since Election Day. Trump has met with several top cryptocurrency executives and pledged to hold and potentially increase the roughly 207,189 btc seized by the US government over the years, a share that now represents more than 1% of the supply. global btc.
In the United States Senate, Wyoming Senator Cynthia Lummis introduced the bitcoin (Boosting Innovation, technology, and Competitiveness through Nationwide Optimized Investment) Act, a measure that would require the Treasury The United States will create a strategic reserve of bitcoin.
At the state level, momentum is gaining momentum. Florida is exploring plans to form its own SBR as early as the first quarter of 2025. The Florida Blockchain Business Association (FBBA) has proposed investing one percent of the state's pension fund (approximately $1.85 billion) in bitcoin. Pennsylvania introduced its SBR Act in November, which could allocate up to 10% of its General Fund to the digital asset. Now, Alabama could be on the verge of a similar move, potentially intensifying interstate competition to secure early and substantial btc holdings.
Sorrell noted that states would likely face fewer regulatory hurdles when purchasing btc than in previous years, particularly after the US Securities and Exchange Commission's authorization of exchange-traded funds (ETFs). “buy cryptocurrencies as easily as you can buy stocks through a traditional brokerage account,” Sorrell said.
He also suggested that a potential Alabama SBR mirror the federal approach promised by President-elect Trump. “We can model the Alabama bitcoin Reserve after the US Federal Strategic bitcoin Reserve that Donald Trump promised to start,” he explained. “The United States Government already owns 207,189 btc, acquired through various seizures (…) for a value of 20 billion dollars. They were planned to be sold, but Trump has promised to keep them and possibly even add more.”
Despite his enthusiasm, Sorrell recommended caution in the execution. He proposed a two-year dollar-cost averaging model to mitigate timing risks, given the volatile nature, particularly after its price recently surpassed $100,000.
“The framework the state should follow would be to average dollar costs over a two-year period. bitcoin just crossed $100,000 recently, so buying into a bull market may not be the best time. A better strategy is monthly purchases over a two-year period that average out the entry price,” Sorrell said.
Like Eric Trump at the MENA bitcoin Conference, Sorrell shared a surprising price prediction: “The idea is that a stockpile of bitcoin (…) is not flipped for a quick profit,” Sorrell said, emphasizing the importance of a long term. term strategy. “It is very likely that bitcoin will one day reach $1 million per coin. The people and institutions that have had the best results investing in bitcoin are the ones that have bought and held for the long term.”
At the time of this publication, btc was trading at $97,607.
Featured image created with DALL.E, chart from TradingView.com
