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Matthew Sigel

VanEck Predicts $23B Bitcoin Buying Pressure from US States

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  • Proposed state-level BTC reserve bills could drive $23 billion in demand.
  • US states could purchase 247,000 BTC if bills pass.
  • VanEck’s Matthew Sigel estimates the $23 billion figure as conservative.

Proposed state-level Bitcoin reserve bills in the United States could lead to significant BTC purchases, potentially driving up to $23 billion in demand. This could translate to the acquisition of approximately 247,000 BTC. VanEck’s Head of Digital Assets Research, Matthew Sigel, highlighted that this figure is a conservative estimate, dependent on the development of these proposals. As state governments push to establish digital currency reserves, a major shift in Bitcoin’s supply and demand dynamics could occur.

Potential $23 Billion in BTC Purchases

Matthew Sigel’s analysis estimates that proposed Bitcoin reserve bills in 20 US states could generate substantial buying pressure. According to his calculations, the cumulative effect of these bills would drive demand for roughly $23 billion in BTC. Sigel noted that the amount could increase significantly, especially if other states follow suit and more details emerge regarding the bills’ scope and implementation.

The figure of $23 billion represents an estimated total purchase of 247,000 BTC, based on current market prices. This amount would surpass the total BTC holdings of the US government, which currently stands at 198,100 BTC. Sigel clarified that this projection excludes any additional investments that might come from pension funds or other institutional allocations.

Status of Strategic BTC Reserve Bills in US States

At present, 19 US states are considering cryptocurrency reserve legislation. Of these, two states—Arizona and Utah—have advanced their bills past the House committee stage. Meanwhile, other states such as Montana, Iowa, and Florida have introduced similar bills that could enable them to invest in digital assets like BTC. However, Ohio, Illinois, and Missouri have not set dates for their proposed bills.

While North Dakota rejected its BTC reserve proposal, several states remain on track to move forward. Texas, for example, is the latest state to file legislation to establish a Bitcoin reserve. Senator Charles Schwertner introduced the “Texas Strategic Bitcoin Reserve and Investment Act,” which would allow the state to buy and trade Bitcoin, as well as other high-market-cap cryptocurrencies.

Institutional Demand for Bitcoin Could Surge

As states move closer to approving BTC reserve bills, their buying activities could significantly impact the overall market. Investment firm Bitwise recently stated that demand from governments and corporations would likely come from individual Bitcoin holders willing to sell their assets. The potential for such large-scale purchases could lead to increased competition for Bitcoin, thereby driving up prices and volatility.

Furthermore, these developments underscore a growing institutional interest in Bitcoin as a strategic asset. If multiple states begin purchasing Bitcoin for their reserves, it could mark a new phase in adopting digital assets. 

Solana Outage Shocker: Was It Sabotage?

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Solana suffered the first outage of 2024, sparking discussions over the five-hour blackout. As developers and critics raged about the event, Matthew Sigel, CEO of digital asset research at VanEck, offered his insights. He highlighted that the BPF [Berkley Packet Filter] loader, which oversees deploying, upgrading, and executing programs on Solana, has crashed. He then made a stunning claim that someone manually triggered the bug, causing the network to come to a screeching halt.

Thankfully, he added that the bug was tracked down by developers and a fix was created, even though it had not yet been implemented. He stated that SOL developers have rewritten the BPF code lines to fix the bugs, meaning that the core software everyone runs must be patched. “Once it is patched, people can start running the software again,” he wrote.

Solana
Solana Outage Shocker: Was It Sabotage? 2

As the crypto community debated the network woes, Sigel gave a glimpse of the next steps to restore the network to action. Validators step up to seek consensus on the last verified block. The network is finally back on track but is met with two scenarios: block production hangs in the balance until 66% of staked SOL validators give the thumbs up. The network resumes only when a majority of 80% agrees on the last block. It remains to be seen if the fix holds up or if Solana is headed for another meltdown.

Solana: Fix in Progress, But A Word Of Caution

Still, questions remain if this outage is a mere stumbling block on the road to innovation or if it is a sign of more turbulence ahead. Experts hint at ongoing debates over future SMIDs and changes to fee markets, suggesting a potential slowdown in Solana’s forward momentum. Sigel further anticipates a post-restart Defi frenzy, with arbitrage bots unleashing a vortex of activity estimated to be worth a whopping $25 million in MEV. However, the excitement comes with a cautionary note:

The activity from the MEV on restart may cause downtime again. This may slow down innovation on Solana as future SMIDs will be more heavily debated. The upcoming change to fee markets, which have been mired in deep debate, may be indicative of this dynamic.

After the network disruption, SOL fell to $93 but has subsequently recovered those losses and stabilized at $97.