US states like Ohio, Texas and Pennsylvania are exploring Bitcoin as a reserve asset to hedge against inflation. However, experts like Nick Carter warn that its volatility could destabilize the global financial system. Despite these risks, Bitcoin’s growing adoption suggests it could play a bigger role in future finance if governments embrace it.

Bitcoin has become a potential investment and store of value. As governments and countries explore new ways to hedge against inflation and economic uncertainty, one of the best ways is through a strategic Bitcoin reserve.

Many US states now view Bitcoin as a reserve asset, which could change how financial systems work.

Bitcoin as a financial asset

Unlike traditional currencies, Bitcoin is not controlled by any government or central authority. Over the years, Bitcoin has grown as both individual and institutional investors view it as an alternative investment.

Some see Bitcoin as a hedge against inflation, a store of value, and even a potential future currency. Recently, even governments and major corporations have begun to notice Bitcoin’s potential as a reserve.

Michael Saylor, CEO of MicroStrategy, was one of the Bitcoin buyers. Saylor bought about 439,000 Bitcoin, equivalent to about $46 billion, for his company’s treasury. This sets an example for other companies and governments to consider Bitcoin as a reserve asset.

Bitcoin Strategic Reserve Interest from the United States

Ohio recently introduced a proposal to create a “Bitcoin Reserve Fund” that would allow the state to purchase Bitcoin as part of its investment strategy.

Recently, both El Salvador and the Central African Republic have adopted Bitcoin as legal tender. Companies like Metaplanet also accept Bitcoin reserves as an asset,

This follows other US states like Pennsylvania and Texas, which have also proposed laws to create Bitcoin reserves. In Ohio, House Republican Leader Derek Merrin introduced the Ohio Bitcoin Reserve Act (HB 703) in December 2024.

This bill would give the Ohio Treasurer the authority to purchase Bitcoin, protecting against a devaluation of the US dollar.

“The value of the US dollar is rapidly depreciating, and our state treasurer should have the authority and flexibility to invest in Bitcoin when determining the appropriate asset allocation,” Merrin said.

Because Bitcoin offers tron ​​potential as a reserve asset due to its deflationary nature, with a fixed supply of 21 million coins, making it a hedge against inflation. It ensures security and independence from political or banking instability.

Bitcoin also provides diversification of a country's reserves, reducing reliance on traditional assets.

Nick Carter, co-founder of Castle Island Ventures, recently spoke to Bloomberg about his concerns about Bitcoin’s potential adoption as a strategic reserve asset during an interview on Bloomberg TV.

He considered that such a move could undermine global confidence in the US dollar, which is the most important in the current financial system.

"I don't think that will happen because it will erode confidence in the dollar, and that would be a negative outcome for everyone involved," Carter said.

He also believes that using Bitcoin as a reserve asset could cause more problems than benefits. He pointed out that the price of Bitcoin could be extremely volatile, which could create problems for the global financial system, which currently relies on the stability of the US dollar.

“This is not a good idea because it could lead to volatility and instability in global markets,” he said. With Bitcoin, it is important for policymakers and financial institutions to consider these risks.

As we all know, the main problem with using Bitcoin as a reserve asset is its price volatility. The value of Bitcoin can change dramatically in a short period of time. For example, in 2021, its price rose from around $70,000 to around $30,000.

This type of price volatility makes Bitcoin an unstable option for governments, as it could lead to unexpected losses if its value suddenly drops.

Another issue is the lack of clear regulations around Bitcoin as mentioned. US Federal Reserve Chairman Jerome Powell recently said that it has nothing to do with Bitcoin, as there are no laws governing its use.

Therefore, the market reaction to Powell’s comments was surprising. This led to a sudden drop in the value of Bitcoin from $107.00 to $101.300. Therefore, Bitcoin can be a risky asset for governments, as sudden market changes can lead to financial instability for investors.

Matt, CTO of Bitwise, said in an interview that Bitcoin could hit $200,000 by December 2025. He highlights three key things that could support the rally: ETFs, public companies like MicroStrategy, and even governments buying Bitcoin.

As he said, “If we get Bitcoin where the government buys Bitcoin… you’re looking at three or four, $500,000 Bitcoin.”

Although he still believes the odds are less than 50%, he could gain traction especially with support from key leaders.

He added: If the US government starts holding Bitcoin as a reserve, its price could rise to $300,000 to $500,000. While this is just an idea.

Some US states like Ohio, Texas and Pennsylvania are considering holding Bitcoin as part of their reserves, hoping it can protect against inflation. But price volatility and the lack of clear rules are major concerns.