The United States could see a significant crypto boom in 2025, with the incoming bitcoin-friendly administration of president-elect Donald Trump and an expanding network of crypto advocates. Together, these factors could drive state-level legislation aimed at embracing cryptocurrency and encouraging public pension funds and treasuries to invest in digital assets like bitcoin.
Supporters of cryptocurrency argue that bitcoin offers a hedge against inflation, likening its role to that of gold. Many bitcoin enthusiasts and investors believe government involvement in crypto could stabilize its volatile price swings, boost its legitimacy, and further strengthen its rising value.
However, the risks remain considerable. Critics highlight the speculative nature of crypto investments and warn that projecting future returns is uncertain, with significant potential for losses. A recent study by the U.S. Government Accountability Office on 401(k) retirement plans investing in crypto echoed these concerns, noting the “uniquely high volatility” of digital assets.
Crypto Legislation Gaining Momentum
Lawmakers across the country are expected to see a wave of pro-crypto legislation in 2025. Analysts point to the growing influence of crypto lobbying efforts, expanding bitcoin mining operations, and venture capital investments that are fueling the cryptocurrency ecosystem.
One federal proposal, championed by Wyoming Republican Senator Cynthia Lummis, seeks to establish a federal bitcoin reserve, which could inspire similar efforts at the state level.
In Pennsylvania, a bill introduced in the House of Representatives aimed to authorize state treasuries and public pension funds to invest in bitcoin. Although the measure failed to progress before the legislative session ended, it generated significant 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 Mike Cabell, the bill’s sponsor. Despite losing his re-election bid, Cabell expects the bill to be reintroduced in 2025.
The bitcoin advocacy group Satoshi Action has announced plans to introduce similar legislation in at least 10 other states next year, further signaling crypto’s growing presence in U.S. policymaking.
Public Pension Funds Remain Wary
Despite the legislative push, public pension funds have been cautious about investing in cryptocurrency. Keith Brainard, research director for the National Association of State Retirement Administrators, noted that crypto’s short track record and high volatility make it a challenging fit for pension funds managing nearly $6 trillion in assets.
“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.”
In Louisiana, Treasurer John Fleming spearheaded efforts to allow state agencies to accept payments in cryptocurrency. While emphasizing the need for government innovation, Fleming expressed skepticism about crypto as an investment, saying, “My concern is that at some point it’ll stop growing and then people will want to cash in. And when they do, it could tank the value of a bitcoin.”
Institutional Interest Grows
Despite hesitancy from pension funds, institutional interest in bitcoin is growing. The SEC’s approval of exchange-traded funds (ETFs) holding bitcoin has provided tools that align with institutional investors’ preferences. Major asset managers like BlackRock, Fidelity, and Invesco have launched bitcoin ETFs, and October saw the approval of options trading for these funds.
Mark Palmer, an analyst at The Benchmark Co. LLC, believes pension boards are gradually warming to bitcoin. “Many are likely in the process of getting up to speed on what it means to invest in bitcoin and kicking the tires, so to speak,” Palmer said.
As 2025 approaches, the intersection of state-level legislation, federal policy shifts, and institutional adoption could position the U.S. as a leader in cryptocurrency integration. Whether this surge will ultimately bring stability or exacerbate crypto’s volatility remains to be seen.
