Alabama Auditor Pushes for State Bitcoin Reserve

State Auditor Andrew Sorrell is advocating for Alabama to establish a strategic Bitcoin reserve, a move he believes will attract businesses and investors by branding the state as a “crypto-friendly” hub. Sorrell’s proposal aligns with the growing momentum for cryptocurrency adoption, fueled in part by President-elect Donald Trump’s pro-Bitcoin stance.

National Momentum for Bitcoin Reserves

Bitcoin’s price has surged over 50% since Trump’s election victory, driven by his promise to create a “national Bitcoin stockpile.” Trump has engaged with crypto leaders during his campaign and vowed to integrate Bitcoin into the nation’s financial strategy, signaling a major shift in federal attitudes toward cryptocurrency.

U.S. Senator Cynthia Lummis (R-Wyo.) has already introduced the BITCOIN Act, which would mandate the U.S. Treasury to create a federal Bitcoin reserve. Advocates of such reserves argue they could mitigate national debt, bolster the dollar, and protect against inflation.

Sorrell sees an opportunity for Alabama to follow suit at the state level. Other states, including Florida and Pennsylvania, are exploring similar initiatives to diversify their financial holdings and establish crypto investment models.

Source: Bill Search

Sorrell’s Case for a Bitcoin Reserve

Sorrell, a long-time crypto advocate, believes investing in Bitcoin could strengthen Alabama’s financial position while preparing for an evolving economic landscape. He cited the rapid growth of the cryptocurrency market—valued at over $3 trillion globally—and the underperformance of traditional investments like bonds.

“A well-balanced portfolio should include exposure to many different asset classes,” Sorrell told 1819 News. “Crypto is the fastest-growing asset class, averaging 55% annual growth over the past 15 years. The state currently has zero exposure to this market. While bonds and Treasuries have their place, earning a 4% yield against 2.7% inflation is barely breaking even.”

Positioning Alabama as a Crypto-Friendly State

Beyond financial diversification, Sorrell argues that embracing Bitcoin could establish Alabama as a leader in technology and innovation.

“Crypto is here to stay,” Sorrell said. “Nearly 500 million people worldwide own cryptocurrency. The debate over its viability is over. The question now is which states will benefit from its growth. States that adopt crypto-friendly tax and regulatory frameworks will attract business and investment.”

Hedging Against Dollar Risks

Sorrell also sees Bitcoin as a safeguard against potential economic turbulence.

“Currently, all of Alabama’s investments are tied to the U.S. dollar,” he explained. “What happens if the dollar loses its status as the world’s reserve currency? What happens if inflation spikes to 8% again, like after the pandemic? Bitcoin’s value operates independently of the dollar and could even benefit from its decline.”

He added that a Bitcoin reserve could strengthen the state’s balance sheet and serve as collateral for future debt, providing Alabama with a financial edge.

A Pragmatic Approach to Investment

Sorrell advocates a cautious, long-term strategy for building Alabama’s Bitcoin reserve. He suggests dollar-cost-averaging—making regular monthly investments over two years—to mitigate market volatility.

“Bitcoin just crossed $100,000, so jumping into a bull market isn’t ideal timing,” he said. “Gradual purchases would smooth out entry costs. The reserve should remain untouched except in catastrophic situations.”

Source: BNC Bitcoin Liquid Index

Sorrell emphasized that Bitcoin’s inherent volatility demands a patient approach, focusing on long-term growth rather than short-term gains.

“Bitcoin could one day reach $1 million per coin,” he predicted. “The best returns have come from those who held onto Bitcoin long-term, ignoring price swings, and continuing to accumulate.”

Source: Case for Bitcoin

Learning from the Federal Model

Sorrell cited Trump’s proposed American Strategic Bitcoin Reserve as a template. The federal government already owns over 207,000 bitcoins—worth about $20 billion—acquired through seizures. Initially slated for auction, Trump has pledged to retain these holdings and possibly expand them, further mainstreaming cryptocurrency as a strategic asset.

The Path Forward

While the concept of state-held crypto reserves is still in its infancy, Sorrell is optimistic about its potential. With SEC approval of Bitcoin and Ethereum ETFs making crypto investments easier, he believes Alabama can take a leadership role in shaping the future of state-level cryptocurrency strategy.

“The states that embrace crypto now will reap the rewards of its growth in the years to come,” Sorrell concluded. “Alabama has the chance to be at the forefront of this transformation.”