West Virginia State Treasury in the US can invest in cryptocurrencies, with Bitcoin being the only qualifying asset

The West Virginia State Senator Chris Rose has introduced a bill called the “Inflation Protection Act” to the state legislature, proposing to allow the State Finance Committee to invest up to 10% of funds in precious metals, certain digital assets, and stablecoins. The bill has been submitted to the Banking and Insurance Committee for review. If passed, West Virginia will become another region, after Texas, Arizona, and New Hampshire, to permit state-level holdings of crypto assets.

Key Points of the Bill

Investment Scope and Standards

According to the proposal of the “Inflation Protection Act,” the assets that the State Treasury can invest in include three categories:

• Precious metals (such as gold and other traditional safe-haven assets)
• Digital assets with a market capitalization exceeding $750 billion in the previous year
• Stablecoins approved by U.S. or state regulators

Based on the $750 billion market cap standard, currently only Bitcoin qualifies. Bitcoin’s current market cap is approximately $1.91 trillion, far exceeding this threshold, with a market share of 59.04%. This means that if the bill passes, Bitcoin will be the only digital asset directly investable by the State Treasury.

Asset Custody and Management Methods

The bill stipulates that digital assets purchased by the State Treasury can be managed through:

• Direct holding by qualified custodians
• Managed via exchange-traded products (ETFs, etc.)
• Managed through secure custody solutions

This flexible management approach lowers the technical barriers for the State Treasury and offers multiple risk management options.

Significance of Policy Breakthrough

Expansion Trend of State-Level Policies in the U.S.

West Virginia’s bill reflects a shift in U.S. policymakers’ perception of cryptocurrencies as an asset allocation tool. From initial outright rejection to active exploration today, this transformation has taken several years but is clearly accelerating.

Why Bitcoin as the Sole Standard

The $750 billion market cap threshold is set quite cautiously. The reason only Bitcoin qualifies under this standard reflects the considerations of decision-makers:

• Bitcoin, as the largest digital asset by market cap, has the highest liquidity and recognition
• Its market cap is large enough to resist manipulation
• It is the most established with the highest regulatory acceptance
• Its positioning as “digital gold” aligns with the original intent of the inflation protection bill

This approach essentially uses market cap as a risk filter rather than outright banning certain coins. It is more objective than a whitelist and leaves room for other assets to be added in the future.

Market and Policy Implications

Insights for the Cryptocurrency Market

Investment decisions by state governments often set examples. If West Virginia’s bill passes, it will send a clear signal to other states and local governments: crypto assets can become formal asset allocation tools. Considering there are 50 states in the U.S., the potential policy ripple effect could be significant.

Reinforcing Bitcoin’s Unique Status

This bill further cements Bitcoin’s special position among digital assets. When government policy explicitly recognizes Bitcoin as the only qualifying digital asset, this official endorsement provides long-term value support.

Future Outlook

Based on current policy trends, the following developments may occur:

• More U.S. states proposing similar bills, creating a policy diffusion effect
• If Bitcoin’s market cap continues to grow, other digital assets may gradually reach the $750 billion standard, leading to automatic expansion of the bill’s scope
• Accumulation of state-level crypto holdings could provide long-term support for market liquidity and prices
• Federal-level policies may reference state policies to develop broader guidance

Summary

West Virginia’s “Inflation Protection Act” represents an important shift in U.S. policymakers’ understanding of cryptocurrencies. It is not an isolated move by a small state but a clear policy signal: digital assets are transitioning from being excluded to being considered as investment tools.

Key points include: first, the bill uses the $750 billion market cap standard to screen assets, reflecting cautious risk management; second, Bitcoin, as the only qualifying digital asset, further solidifies its official recognition; finally, this policy could inspire other states to follow suit, forming a broader foundation of policy support.

For market observers, the critical factor is whether this bill ultimately passes the review of the Banking and Insurance Committee and whether other states move quickly to follow. These will be important indicators of whether the crypto policy environment is truly shifting.