Andrew Sorrell, Alabama State Auditor, has publicly proposed creating a Strategic Bitcoin Reserve (SBR). Sorrell’s call comes amid a growing wave of interest in SBRs among federal and state policymakers, as well as a sharp rise in the price of BTC following the election of President-elect Donald Trump, who campaigned on pro-bitcoin policies.
talking to 1819 NewsSorel emphasized what he sees as the inevitability of the long-term success of Bitcoin and cryptocurrencies: “The debate over whether cryptocurrencies will succeed is over.” He further emphasized the value of digital assets in expanding the country’s portfolios: “To date, cryptocurrencies are a $3 trillion asset class to which the country has absolutely no exposure. It is also the fastest growing asset class (…) with the greatest potential for price appreciation.”
Will Alabama Next Draft a Bitcoin Strategic Reserve Bill?
According to Sorrell, creating an SBR would serve three main goals: portfolio diversification, crypto-friendly positioning, and protection against currency-related risks. “What would happen if the dollar stopped being the world’s reserve currency?” – asked Sorel. “What would happen if inflation rose to 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 issuances.”
The Sorel Initiative is closely following national and federal developments. President-elect Trump’s stated intention to create a “national stockpile of Bitcoin” has become clearer after the price of Bitcoin rose by 50% since Election Day. Trump met with several top cryptocurrency executives and pledged to preserve, and perhaps add, the approximately 207,189 bitcoins that the US government has seized over the years, ownership that now represents more than 1% of the global supply of bitcoin.
In the US Senate, Wyoming Senator Cynthia Lummis introduced the Bitcoin (Enhancing Innovation, Technology, and Competitiveness through Optimal Nationwide Investment) Act, a measure that would require the US Treasury to establish a strategic reserve of bitcoin.
At the state level, momentum is growing. 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 — an estimated $1.85 billion — in Bitcoin. Pennsylvania introduced its SBR law in November, which could allocate up to 10% of its general fund to digital assets. Now, Alabama could be on the verge of making a similar move, which could intensify competition among states to secure early and large Bitcoin holdings.
Sorrell noted that states are likely to face fewer regulatory hurdles in purchasing Bitcoin than in previous years, particularly following the SEC’s licensing of exchange-traded funds (ETFs). “Countries can buy cryptocurrencies just as easily as they can buy stocks through a traditional brokerage account,” Sorrell said.
He also suggested that a potential SBR in Alabama would reflect the federal approach promised by President-elect Trump. He explained: “We can model the Alabama Bitcoin Reserve on the lines of the US Federal Strategic Bitcoin Reserve that Donald Trump promised to start up.” “The US government already owns 207,189 bitcoins, obtained through various seizures (…) worth $20 billion. They were to be sold, but Trump pledged to keep them and perhaps add more.
Despite his enthusiasm, Sorel advised caution in implementation. He suggested a two-year dollar-cost averaging model to mitigate timing risks, given the volatile nature – especially after its price recently surpassed $100,000.
“The framework the country should follow is to dollar-cost average our way over a two-year period. Bitcoin has topped over $100,000 recently, so buying in a bull market may not be the best timing.” A better strategy is buys monthly over a two-year period that averages out your entry price,” Sorrell said.
Just like Eric Trump at the MENA Bitcoin Conference, Sorrell shared a startling price prediction: “The idea is that the Bitcoin reserve (…) is not flipping it to make a quick profit,” stressing the importance of having a long-term reserve of Bitcoin (… ) term strategy. “It is very likely that one day Bitcoin will reach $1 million per coin. The individuals and institutions that have put their best effort into investing in Bitcoin are the ones that have bought and held it for the long term.
At press time, Bitcoin was trading at $97,607.
Featured image created with DALL.E, a chart from TradingView.com
Comments are closed, but trackbacks and pingbacks are open.