Alabama State Auditor Calls for Strategic Bitcoin Reserves in the US

Andrew Sorrell, Alabama State Auditor General, has joined the growing list of figures advocating for strategic Bitcoin reserves in the United States. This move comes as federal and state legislators increasingly consider the idea, following Donald Trump’s victory on November 6.

Benefits of a Strategic Bitcoin Reserve

According to Sorrell, establishing a strategic Bitcoin reserve would help Alabama and other US states to diversify their government portfolios, hedge against risks associated with fiat currencies and inflation, and position themselves as crypto-friendly business areas. Sorrell emphasized that the debate over whether cryptocurrency will succeed has ended, and it’s time for the US to take a proactive approach.

“The debate over whether crypto will succeed has ended.” – Andrew Sorrell, Alabama State Auditor General

A Cautionary Approach to Building a Bitcoin Reserve

Sorrell advised caution when building a Bitcoin reserve, suggesting that Alabama follow a federal bill presented by Wyoming Senator Cynthia Lummis. This bill proposes a dollar-cost average (DCA) plan, which involves buying predetermined amounts of an asset over a given period. Sorrell recommended that Alabama accumulate its reserve over two years, using a monthly purchase plan to average out the entry price.

“The framework the state should follow would be to dollar-cost-average our way in over 2 years. A better strategy is monthly purchases over a 2-year period that average out your entry price.” – Andrew Sorrell, Alabama State Auditor General

Increasing Demand for a Bitcoin Reserve

Sorrell’s proposal reflects the growing demand for a Bitcoin reserve at the state level, an idea that has gained momentum following promises from President-elect Donald Trump and his incoming administration. Trump has tapped industry leaders for advice, including Coinbase CEO Brian Armstrong, and has nominated pro-crypto former federal regulator Paul Atkins as chair of the Securities and Exchange Commission.

Senator Lummis has also introduced a bill, known as the BITCOIN bill, which aims to accumulate 4% of Bitcoin’s fixed supply over five years, if approved by the Senate. This move demonstrates the increasing interest in Bitcoin reserves at the federal and state levels.

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