Alabama State Auditor Andrew Sorrell has publicly proposed the creation 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 newly elected President Donald Trump, who campaigned on a pro-Bitcoin policy.
Speak with 1819 NewsSorrell emphasized what he sees as the inevitability of Bitcoin and crypto’s long-term success: “The debate over whether crypto will succeed has ended.” He further underlined the value of digital assets in broadening state portfolios: “As of now, crypto is a $3 trillion asset class to which the state has zero exposure. It is also the fastest growing asset class (…) with the greatest potential for price appreciation.”
Is Alabama Next to Create a Strategic Bitcoin Reserve Bill?
According to Sorrell, setting up an SBR would serve three main purposes: portfolio diversification, crypto-friendly positioning, and protection against currency-related risks. “What happens when the dollar is no longer the world’s reserve currency?” Sorrell asked. “What happens when inflation reaches 8% again? (…) The value of Bitcoin is not affected by what happens to the US dollar (…) It would strengthen our state’s balance sheet and could be used as collateral for future debt issuance.”
Sorrell’s initiative closely follows national and federal developments. This is what President-elect Trump says intention Creating a “national Bitcoin supply” has become more tangible following a 50% increase in the price of BTC since Election Day. Trump has met with several top crypto officials and vowed to preserve and possibly expand the approximately 207,189 BTC that the US government has seized over the years, an asset that now represents more than 1% of the global BTC supply represents.
In the US Senate, Senator Cynthia Lummis of Wyoming has done just that introduced the BITCOIN Act (Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide), a measure that would require the US Treasury Department to create a strategic Bitcoin reserve.
At the state level, momentum is building. Florida is investigating 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 – an estimated $1.85 billion – in Bitcoin. Pennsylvania introduced the SBR law in November, which could spend up to 10% of the general fund on digital assets. Now Alabama could be on the brink of a similar move, potentially increasing competition among states to secure early and substantial BTC holdings.
Sorrell noted that states will likely face fewer regulatory hurdles when purchasing BTC than in previous years, especially following the U.S. Securities and Exchange Commission’s approval of exchange-traded funds (ETFs). “States can buy into Crypto as easily as they would through a traditional brokerage account,” Sorrell said.
He also suggested that a potential SBR in Alabama would mirror the federal approach that President-elect Trump had promised. “We can model Alabama’s Bitcoin Reserve after the federal US Strategic Bitcoin Reserve that Donald Trump promised to start,” he explained. “The US government already owns 207,189 BTC, acquired through various seizures (…) worth $20 billion dollars. Those were going to be sold, but Trump has promised to keep them and possibly even add more.”
Despite his enthusiasm, Sorrell advised caution in implementation. He proposed a two-year dollar cost model to limit timing risks given its volatile nature – especially after the price recently surpassed $100,000.
“The framework the state should follow would be to determine the dollar cost average over a two-year period. Bitcoin recently surpassed $100,000, so buying in a bull market may not be the best timing. A better strategy is monthly purchases over a two-year period that average out your entry price,” Sorrell said.
Just like Eric Trump at the Bitcoin MENA conference, Sorrell shared an eye-popping price prediction: “The idea is that a Bitcoin reserve (…) doesn’t flip it for a quick profit,” Sorrell said, emphasizing the importance of a long-term strategy. “It is very likely that Bitcoin will one day reach $1 million per coin. The individuals and institutions that have done the best with Bitcoin investments are the ones that bought and held for the long term.”
At the time of writing, BTC was trading at $97,607.
Featured image created with DALL.E, chart from TradingView.com