New Hampshire Crypto Reserve Bill: Sign of More to Come?
Individual crypto investors looking for the best trading opportunities may be considering crypto assets experiencing the greatest level of price appreciation. According to Binance, here are the values of the top 10 cryptocurrencies currently experiencing the highest price gains.
However, when it comes to investment from larger market participants, the focus remains on the largest, most established cryptocurrencies, such as Bitcoin, as well as top Altcoins like Ether.
It's no longer just institutional investors and entities like the U.S. Federal Government that are looking to plow capital into these institutional-grade crypto assets.
Pretty soon, individual U.S. states could join in as well. At least, that's the takeaway, following recent news of New Hampshire becoming the first state in the nation to authorize the formation of a strategic cryptocurrency reserve.
New Hampshire, nicknamed the 'live free or die' state, and well known for its strong association with libertarianism, makes for an unsurprising choice for the first state to approve a crypto reserve bill.
On May 6, the New Hampshire legislature approved, and Governor Kelly Ayotte signed into law, a bill allowing the New Hampshire state government to invest up to 5% of public funds into digital assets that have a market capitalization of at least $500 billion. In other words, New Hampshire is now allowed to invest in Bitcoin, but not in other cryptocurrencies.
Although the specifics may represent disappointing news for altcoin investors, for Bitcoin 'HODLers,' this could be a promising development. I say 'could be,' because it'll likely take several U.S. states to set up strategic Bitcoin reserves, before this trend starts to have a meaningful impact on BTC prices.
So, as the 'Live free or die' state goes, so goes the nation? Not so fast. Proposed bills authorizing crypto reserves have been introduced in several U.S. states, but for now the passage of a New Hampshire-style bill appears questionable.
According to the National Law Review , 15 other state legislatures outside of New Hampshire have proposed legislation authorizing the creation of a strategic cryptocurrency reserve. Most, but not all of these U.S. states voted for President Trump in last year's election.
However, while some lawmakers in other states have tried, so far none of these bills have made it past the legislative stage. This failure continues, even as recent moves by the U.S. Federal Government setting the precedent for U.S. government ownership of crypto assets.
Although one other state (Arizona) has technically also signed a crypto reserve bill into law, this bill is not akin to the one passed by New Hampshire. Rather, this bill only allows the use of unclaimed crypto to build a reserve. The bill does not allow the purchase of additional crypto using public funds.
That said, while legislative progress on this issue appears murky right now, perhaps the passage and implementation of New Hampshire's law will inspire legislators in these states to reconsider their decision.
Again, it'll likely take a critical mass of U.S. states investing in Bitcoin before this catalyst starts to have a positive effect on prices. As it stands now, it's unclear if more individual states will ultimately establish their own state-level strategic Bitcoin reserves.
However, beyond just the potential for state-level legislative progress to arrive down the road, it's not as if the Federal Government's strategic reserve plans have fully played out. While the federal-level strategic reserve for now consists only of seized crypto assets, this could eventually change.
Per the executive order authorizing this reserve, President Trump has directed federal agencies to identify 'budget-neutral' ways to acquire additional crypto assets. In Congress, House of Representatives members such as Nick Begich (R-AK) have introduced legislation that would enable the U.S. Federal Government to buy 1 million Bitcoin over the course of five years.
In short, subsequent strategic reserve-related moves could outweigh any further action (or inaction) from individual U.S. states, resulting in billions of dollars in additional capital flowing into this asset class.
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