West Virginia State Senator Chris Rose has introduced the Inflation Protection Act of 2025, aiming to diversify the state’s treasury holdings by including digital assets and precious metals. The legislation, submitted on Feb. 14, proposes allowing investments in digital assets with a market capitalization exceeding $750 billion, which currently applies only to Bitcoin (BTC).
A Move Toward Digital Asset Reserves
The bill would cap investments in digital assets and precious metals at 10% of total treasury funds, allowing holdings either on-chain or through exchange-traded funds (ETFs). Proponents argue that adding Bitcoin to the treasury could serve as a hedge against inflation and economic instability, particularly amid growing concerns over government deficit spending.
A Growing Trend Among States
West Virginia joins nearly two dozen U.S. states exploring digital asset reserves as a strategy to safeguard public funds against currency devaluation. The trend began with Wyoming in 2024 and has since gained momentum across the country.
On Feb. 6, Utah’s House of Representatives passed a similar bill, now pending a Senate vote. If approved, it would allow treasury allocations into Bitcoin, high-value altcoins, and stablecoins. Kentucky also introduced legislation the same day, proposing up to 10% of state funds be allocated to Bitcoin and other digital assets.
Michigan followed suit on Feb. 13 with a bill that differs from other state proposals by not specifying asset-type limitations, potentially allowing broader crypto investments. Other states, including Texas, North Dakota, North Carolina, South Dakota, Massachusetts, and New Hampshire, are also considering similar legislative measures.
At the federal level, President Donald Trump recently signed an executive order directing a working group to evaluate the feasibility of a national digital asset reserve. This move has sparked speculation that individual states may advance Bitcoin adoption ahead of federal policymakers as the regulatory landscape continues to evolve.
Economic Implications and Market Impact
Analysts suggest that growing state-level adoption of Bitcoin reserves could significantly impact market demand. According to asset management firm VanEck, such legislative moves could contribute up to $23 billion in Bitcoin demand.
The trend is expected to encourage greater institutional involvement in the digital asset space, with state treasuries beginning to treat Bitcoin as a legitimate reserve asset alongside traditional stores of value like gold. However, critics warn that Bitcoin’s price volatility could pose risks to public treasuries, necessitating careful risk management strategies.
The West Virginia bill will now undergo committee review before advancing through the legislative process. Lawmakers and financial experts are closely monitoring how the state navigates both the opportunities and challenges of integrating Bitcoin into its financial strategy.
