Illinois and Indiana have introduced bills to establish a Strategic Bitcoin Reserve. They join a growing list of US states exploring Bitcoin as a financial asset. 

While Illinois aims to create a Bitcoin reserve fund, Indiana’s bill differs slightly. It explores how blockchain technology can enhance state agency operations. In addition, the bill explores investments in Bitcoin exchange-traded funds (ETFs).

Illinois’ Push for a Bitcoin Reserve

Illinois State Representative John M. Cabello has introduced House Bill 1844 (HB1844), also known as the Strategic Bitcoin Reserve Act. The bill highlights Bitcoin’s potential as a decentralized, finite digital asset that could serve as a hedge against inflation and economic volatility.

“A strategic bitcoin reserve aligns with Illinois’ commitment to fostering innovation in digital assets and providing Illinoisans with enhanced financial security,” the bill read.

The proposed bill seeks to establish the Strategic Bitcoin Reserve Fund, overseen by the State Treasurer. It offers provisions for accepting Bitcoin donations from residents and government entities.

Furthermore, the bill specifies a minimum holding period of five years. Therefore, any Bitcoin added to the fund would be held for the specified time before the state could sell, transfer, or convert it into another cryptocurrency. 

The bill also lays out guidelines for securing and managing the fund. It requires transparency through regular reports and gives the State Treasurer the power to set necessary rules.

Indiana’s Bitcoin Strategy

Meanwhile, Indiana is taking a slightly different approach. House Bill 1322, authored by state Representative Jake Teshka and co-authored by Representatives Shane Lindauer and Cory Criswell, focuses on both blockchain adoption and Bitcoin investment strategies. 

The bill directs the Department of Administration to explore how blockchain technology could improve government efficiency, data security, and consumer experience.

“The department of administration (department) shall issue a request for information for purposes of exploring how the use of blockchain technology could be used by a state agency to: (1) achieve greater cost efficiency and cost effectiveness; and (2) improve consumer convenience, experience, data security, and data privacy,” HB1322 states.

It also paves the way for state-managed investment in Bitcoin. The bill allows funds from the public employees’ retirement fund, state teachers’ retirement fund, and public officers’ funds to be invested in approved Bitcoin exchange-traded funds (ETFs). 

These include spot Bitcoin ETFs, which hold Bitcoin directly. Additionally, it includes Bitcoin futures ETFs. These track Bitcoin’s price movements through derivatives.

This move comes as Utah and Arizona advance legislation to invest public funds in digital assets. Furthermore, Texas Lieutenant Governor Dan Patrick has made the Bitcoin Reserve a top priority for 2025.

Similar proposals from South Dakota and Kentucky may follow as state representatives prepare to introduce bills creating a Strategic Bitcoin Reserve.

Dan Patrick, Lieutenant Governor for the State of Texas, listed Bitcoin Reserve as a top priority for 2025. Other industry-adjacent priorities include “Texas D.O.G.E.” and electrical grid upgrades.

However, Patrick did not give any clear indications of pro-crypto sentiments before today and actually criticized the mining industry in Texas last year. It is unclear how deep his newfound commitment to the industry will go.

A Texas Bitcoin Reserve

The movement to create a US national Bitcoin Reserve has been growing in strength for months now. Around 15 states are crafting legislation for state-level Bitcoin reserves, and Texas has been an early and persistent member of this coalition.

Today, Lt. Gov. Dan Patrick listed the establishment of a Texas Reserve as a “top priority” for 2025.

Although the push for a national-level reserve is apparently growing, it has received a few setbacks. President Trump issued an executive order to create a “digital stockpile,” which is neither Bitcoin-exclusive nor integrated with the Federal Reserve.

Some have feared that this half-measure may sap energy for a national reserve, but Texas is still trying to stockpile Bitcoin.

Initially, Patrick announced the names of 25 bills with the “top priority” designation and will follow up with 15 more. However, only a few of these directly or indirectly benefit crypto. The Texas Bitcoin Reserve proposal is an obvious help, as is the “Texas D.O.G.E.” proposal.

However, the governor preemptively addressed these concerns, saying he limited his initial set of goals:

“Senators like having a low bill number since it shows their bill is a priority of the Lt. Governor and has a high probability of passage. Just because a bill is not included in the top 40 does not mean it is not a priority for me or the Senate. There will be hundreds of bills that pass the Senate, all of which are important to Texas,” Governor Patrick claimed.

Additionally, several other priority bills would clearly help Texas’ Bitcoin industry through one avenue: crypto mining. The state has become a hub for mining, with several leading companies relocating to Texas in the last year.

Some of Patrick’s other priorities, like investing in the electrical grid or water supply, would likely benefit this industry.

“A US state moving to hold BTC on the books? That’s next-level adoption. If this passes, Texas wouldn’t just be mining-friendly – it’d be holding hard money on a state balance sheet,” wrote Mario Nawfal.

Ultimately, though, it may be too early to get particularly excited. Patrick has occupied this position for a decade, and he hasn’t made any substantial pro-crypto statements or policies before this.

In fact, he publicly criticized the mining sector last year. In short, the governor may have placed a top priority on a Texas Bitcoin Reserve, but the bill still needs to pass.

The Federal Reserve kept its benchmark interest rate unchanged at 4.25%-4.50% on Wednesday.  This marks a ‘hawkish pause’ as inflation remains elevated and economic activity grows at a steady pace. 

The decision follows three consecutive rate cuts in late 2024 but signals that policymakers remain cautious about premature monetary easing.

Steady Interest Rates Likely to be Bullish for Crypto 

There haven’t been any major market movements following the announcement. Usually, steady rates are bearish for the crypto market. Fed’s stance suggests that capital will not flow into high-risk assets as quickly. 

However, major cryptocurrencies saw a modest uptick. Bitcoin, Solana, and XRP each gained nearly 2% in the hour after the news. 

So, there’s likely a market optimism over continued liquidity stability. A pause in rate hikes is generally viewed as bullish for risk assets, including cryptocurrencies. 

Lower interest rates—or expectations of stable rates—make traditional fixed-income investments less attractive. This drives investors toward higher-yielding assets like equities and crypto. 

“Trump’s out here begging for a cut, but the Fed’s like ‘nah.’ It’s bad news for crypto, cause when interest rates stay high, investors chill out and avoid risk. But if Powell flips the script and gets all dovish, we could see some action,” Mario Nawfal wrote on X (formerly Twitter).

Additionally, a ‘Hawkish Pause,’ suggests that economic conditions are stable enough to avoid aggressive tightening. This creates a favorable environment for crypto markets, which thrive on liquidity and investor confidence.

Fed’s Policy Stance and Market Expectations

Despite keeping rates steady, the Fed’s statement indicated that inflation remains elevated and removed previous references to progress toward its 2% goal. This suggests that further rate cuts may not be imminent. 

However, steady employment levels and economic resilience reduce recession fears, supporting speculative assets like Bitcoin and other cryptocurrencies. 

President Trump had urged the Fed to continue cutting rates, but central bank officials chose to maintain their current stance.

Overall, the crypto market will closely monitor any signals of future liquidity expansion. Until the Fed shifts toward rate cuts or implements measures that increase monetary stimulus, altcoins are expected to underperform Bitcoin. 

Bitcoin, with its stronger institutional appeal and macro resilience, remains the safer bet in a hawkish monetary environment.