State Senator Chris Rose has taken a bold step by introducing legislation that would allow the West Virginia Treasury to diversify its holdings by including digital assets and precious metals. The Inflation Protection Act of 2025, submitted on Feb. 14, proposes allowing investments in digital assets with a market capitalization exceeding $750 billion.
At present, this legislation applies only to Bitcoin (BTC), as Ethereum’s (ETH) market cap falls below the mandated threshold. The bill would limit investments in digital assets and precious metals to 10% of total treasury funds, providing the flexibility to hold assets either on-chain or through exchange-traded funds (ETFs).
Advocates of this move argue that diversification could serve as a hedge against inflation and fiscal instability, particularly as concerns mount over the long-term impact of deficit spending at both state and federal levels.
West Virginia is just one of nearly two dozen US states exploring the idea of digital asset reserves to safeguard public funds from currency devaluation. This trend was kickstarted by Wyoming in 2024. Utah’s House of Representatives recently approved a similar bill, Kentucky introduced legislation on the same day, and Michigan followed suit shortly after.
The growing interest in digital assets as an alternative store of value has prompted states like Texas, Wyoming, North Dakota, and others to consider similar measures. Even at the federal level, President Donald Trump has directed a working group to explore the feasibility of a national digital asset reserve.
The potential economic implications of increasing state-level adoption of Bitcoin reserves are significant. Analysts suggest that this trend could drive additional demand for digital assets, potentially influencing market prices and broader financial market trends. According to VanEck, states pursuing such legislation could contribute up to $23 billion in Bitcoin demand.
While the integration of digital assets into public funds may encourage greater institutional involvement in the space, critics warn about the risks associated with Bitcoin’s price volatility. The West Virginia bill will now undergo committee review before further legislative consideration, paving the way for other states to navigate the challenges and opportunities of digital asset adoption.
As the regulatory landscape for digital assets continues to evolve, state treasuries are poised to play a pivotal role in shaping the future of financial strategies. By embracing digital assets alongside traditional stores of value, states like West Virginia are setting a precedent for others to follow in the pursuit of economic resilience and stability.