 Bitcoin reserves and sovereign wealth funds in the US, explained 
2025-02-07
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On Feb. 4, newly appointed crypto czar David Sacks said in a press conference that the bicameral crypto working group is looking into a strategic Bitcoin reserve (SBR) and highlighted that “the concept of the sovereign wealth fund is a little separate.”
Indeed, sovereign wealth funds (SWFs) have been loosely understood by the cryptoverse, often mistaken for a vehicle that could naturally include Bitcoin BTCUSD or other digital assets. SWFs are government-owned investment funds that manage national savings, often built from surplus revenues like oil profits or trade gains.
Their main goal is to grow and protect wealth long-term, ensuring economic stability for future generations. Unlike central banks, which focus on managing currency and monetary policy, SWFs take a more strategic approach, investing in real estate, stocks, infrastructure and local businesses.
Essentially, they prioritize steady growth over high-risk bets, making them a key tool for countries looking to secure financial security beyond immediate needs.
The definition of a sovereign wealth fund is why Sacks quickly pointed out that a SWF and an SBR should not be confused. The scope of a SWF will likely be used for a much broader purpose than a specific reserve, including propping up domestic companies and market infrastructure.
Bill Hughes, senior counsel for blockchain software firm Consensys, told Cointelegraph that the concept of a sovereign wealth fund, whose creation was ordered by US President Donald Trump on Feb. 3, could serve as “the second-place solution if a crypto-only strategic reserve doesn’t pan out.”
As these initiatives gain momentum, they raise important questions about the role of crypto in state-level investment strategies and what this could mean for the broader digital asset industry in 2025 and beyond. 
State-level sovereign wealth funds, Bitcoin reserve plans already in US
A handful of states already have SWFs that would fall under this classical definition in the US. The Alaska Permanent Fund, established in 1976, channels oil revenues into a diversified investment portfolio, supporting the state budget and annual dividends for residents.
Texas’ Permanent School Fund uses oil and gas revenues to fund public education while ensuring financial stability. Similarly, Wyoming’s Permanent Mineral Trust Fund and North Dakota’s Legacy Fund invest earnings from oil, gas and mineral extraction to smooth budget fluctuations and preserve wealth for future generations.
New Mexico’s Severance Tax Permanent Fund follows a similar model, reinvesting severance tax revenues from resource extraction to support the state’s financial health. While these funds serve different purposes, they share a common goal: turning temporary resource booms into lasting financial security.
The count increases when analysts include state-managed funds that set aside surpluses, such as rainy day or stabilization funds. Some of these funds are invested, sometimes in diversified portfolios.
This brings the total to as many as 23 states with some form of these investment vehicles. However, their mandates and structures may differ from the “classic” SWF model. 
On the positive side, there are currently 15 states that have at least introduced Bitcoin and digital asset legislation. In the current race of these states, Arizona and Utah are tied in the lead at the chamber vote level.
Arizona’s bill proposes the creation of a strategic Bitcoin reserve fund, capped at 10% of public funds, but only if the US government establishes its own SBR. It aligns with Senator Lummis’ Bitcoin Act, which aims to enable states to participate in a federally managed program. 
Utah’s bill would allow up to 10% of several major state funds to be invested in digital assets, protect self-custody rights, and ensure that nodes are not classified as money transmitters. With a broad definition of “digital assets” and no direct mention of Bitcoin, Utah’s bill takes a comprehensive approach to integrating crypto into state-level investment strategies.
North Dakota’s bill (HB1184) and Wyoming’s bill (HB201) both failed to pass through their respective state processes. 
It is a matter of when, not if
The rapid emergence of Bitcoin and digital asset reserve legislation at the state level signals a fundamental shift in how governments view crypto as a speculative asset and a potential strategic reserve.
Whether these efforts materialize into actual Bitcoin holdings or remain symbolic gestures will depend on political will, regulatory clarity and market conditions. What is certain, however, is that the conversation has moved beyond theory.
As states experiment with digital asset reserves and the federal government navigates its own sovereign wealth strategy, the role of Bitcoin in public finance is no longer a question of “if” but “when” and “how.”