Michigan Lawmakers Advance Bill to Allocate State Funds Into Bitcoin

Michigan lawmakers are moving closer to establishing a Michigan Bitcoin Reserve, marking a pivotal moment in the state’s financial strategy. The proposal, known as House Bill 4087 (HB 4087), would authorize the state treasury to invest up to 10% of its reserves in bitcoin and potentially other cryptocurrencies. After seven months of inactivity, the bill advanced on Thursday to its second reading in the state House of Representatives, bringing Michigan one step closer to joining the growing list of governments experimenting with digital assets.

Bill Overview and Legislative Progress

Introduced in February, HB 4087 aims to build a strategic bitcoin reserve by granting the state treasury the authority to diversify a portion of its reserves into digital currencies. The bill has now been referred to the Committee on Government Operations, a critical step before it can move forward to a full vote.

If enacted, Michigan would become the fourth U.S. state to adopt bitcoin reserve laws, joining Texas, New Hampshire, and Arizona. Texas has already allocated $10 million for the purchase of bitcoin in June 2025, while New Hampshire and Arizona have yet to commit state funds despite passing similar legislation.

Growing Trend of Sovereign Bitcoin Adoption

The momentum behind sovereign adoption of bitcoin is accelerating in 2025. States and countries worldwide are exploring the role of digital assets in their financial reserves as part of a broader strategy to hedge against inflation and diversify away from traditional fiat currencies.

The U.S. House of Representatives recently directed the Treasury Department to conduct a feasibility study on a potential national bitcoin reserve.

Market Implications and Public Finance Strategy

Bitcoin’s market performance in 2025 has reinforced its appeal to institutions. Bitcoin prices have risen 25% since the beginning of the year, reaching a record high near $124,500 in August. This upward trajectory has bolstered confidence among policymakers and corporations considering digital assets for their treasuries.

Corporations such as MicroStrategy and Tesla have already integrated bitcoin into their reserves, citing diversification and inflation hedging as key motivations. Michigan’s move could accelerate mainstream acceptance of bitcoin as a legitimate asset class in the broader financial system.

Support and Skepticism

Supporters of HB 4087 argue that bitcoin can act as “digital gold,” offering Michigan long-term value preservation and protection against the erosion of purchasing power. They also emphasize the state’s ability to attract blockchain and fintech innovation by positioning itself as a forward-thinking financial hub.

However, critics remain cautious. The main concern revolves around bitcoin’s volatility, which can lead to sharp swings in the value of reserves. Opponents warn that public funds, which safeguard taxpayer money, should not be exposed to such risks without clear safeguards.

National and Global Context

The discussion around bitcoin reserves is not limited to U.S. states. Countries such as El Salvador have already adopted bitcoin as legal tender and incorporated it into their national reserves. Meanwhile, Hong Kong and several European nations are actively studying stablecoins and central bank digital currencies (CBDCs) as alternatives.

If Michigan successfully establishes a Bitcoin reserve, it could encourage other states to follow suit. This wave of adoption may reshape public finance strategies by blending traditional reserve assets like gold and bonds with digital alternatives.

Conclusion

Michigan’s HB 4087 represents more than a legislative proposal—it reflects a broader shift toward integrating digital assets into government finance. By pushing forward with the idea of a Michigan Bitcoin Reserve, lawmakers are signaling both confidence in bitcoin’s future and a desire to diversify the state’s financial resources.

As the bill moves through further legislative review, its outcome could set a precedent for how U.S. states manage digital assets within public treasuries.

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