Analysts predict a surge of cryptocurrency activity in the U.S. in 2025 as bitcoin miners expand operations, venture capitalists pour resources into the sector, and a growing crypto lobby gains traction in statehouses. The impending presidency of Donald Trump, who is considered bitcoin-friendly, is expected to add momentum to these developments, potentially influencing state policies and public investment strategies.
Supporters of cryptocurrency liken bitcoin to gold, viewing it as a hedge against inflation. They argue that increased government adoption of bitcoin could stabilize its notoriously volatile price, lend it legitimacy, and further bolster its rising value.
“Government-backed currencies are prone to devaluation,” say bitcoin advocates, adding that broader acceptance of bitcoin could lead to greater price stability and growth in the market.
However, critics caution that cryptocurrency remains a highly speculative investment with uncertain returns. They warn that investors should be prepared for the possibility of significant financial losses.
A recent U.S. Government Accountability Office study on crypto investments in 401(k) retirement plans highlighted bitcoin’s “uniquely high volatility” and the absence of a standard framework for projecting its future returns.
Legislative Push on the Horizon
Lawmakers across multiple states are expected to see an influx of crypto-related bills in 2025. Analysts attribute this to the growing influence of the cryptocurrency lobby, expanding bitcoin mining operations, and venture capital backing the sector.
At the federal level, the Trump administration, alongside Congress, could consider legislation introduced by Wyoming Senator Cynthia Lummis to establish a federal bitcoin reserve. Such a move could pave the way for state-level initiatives to follow suit.
In Pennsylvania, a recent bill proposed allowing the state treasurer and public pension funds to invest in bitcoin. While the bill failed to progress before the legislative session ended, it sparked significant public interest.
“I had a friend who is a rep down the road text me, ‘Oh my god, I’m getting so many emails and phone calls to my office,’ more than he ever did about any other bill,” said Republican lawmaker Mike Cabell, the bill’s sponsor. Cabell, a bitcoin enthusiast who lost his re-election bid, expects the proposal to be reintroduced in 2025.
Bitcoin advocacy group Satoshi Action anticipates similar legislation to be introduced in at least 10 states next year.
Public Pension Funds Remain Cautious
Despite the growing enthusiasm, most public pension funds remain wary of investing in cryptocurrencies. Keith Brainard, research director for the National Association of State Retirement Administrators, noted that pension fund managers, who oversee nearly $6 trillion in assets, prioritize investments with predictable risk-to-reward ratios.
“There might be a bit of dabbling in bitcoin,” Brainard said. “But it’s difficult to envision a scenario in which pension funds right now are willing to make a commitment.”
Louisiana Treasurer John Fleming, who helped implement a system allowing residents to pay government agencies with cryptocurrency, remains skeptical about its investment potential.
“My concern is that at some point it’ll stop growing and then people will want to cash in,” Fleming said. “And when they do, it could tank the value of a bitcoin.”
While Pennsylvania treasury officials have the authority to invest in cryptocurrency under existing state law, they view bitcoin’s volatility as unsuitable for the agency’s need for stability in managing short-term investments.
Pension funds may slowly adopt bitcoin as investment tools evolve. The approval of exchange-traded funds (ETFs) holding bitcoin, along with options on those ETFs, has provided institutional investors with more familiar vehicles to explore the cryptocurrency market.
Several asset management giants, including BlackRock, Invesco, and Fidelity, now offer bitcoin ETFs, signaling a growing acceptance of cryptocurrency among institutional investors. Mark Palmer, an analyst at Benchmark Co. LLC, predicts that pension boards will continue “kicking the tires” on bitcoin investments as they gain a deeper understanding of the asset.
