Michigan Advances HB 4087 to Create 10% Bitcoin Reserve
Michigan’s House Bill 4087, also known as the strategic Bitcoin Reserve bill, has moved to a second reading and is set for review by the Government Operations Committee. The proposal would amend the state budget act to let the treasurer allocate up to 10% of the general fund, countercyclical budget, and economic stabilization fund into bitcoin and other digital assets. The Bitcoin Reserve framework enforces strict crypto custody and audit standards: exclusive state control of private keys, end-to-end encryption, geographically split secure data centers, multiparty sign-offs, and regular third-party audits. Holdings could be managed through secure custody solutions, qualified custodians, or exchange-traded products. The law also allows loaning digital assets to generate returns under a capped risk model. If passed, Michigan would become the fourth U.S. state to set up a Bitcoin Reserve, following Texas, New Hampshire, and Arizona. Supporters say the reserve offers a hedge against inflation and dollar weakness, while opponents, including the Michigan Bitcoin Trade Council, fear non-Bitcoin assets could add undue volatility.
Bullish
The bill’s approval signals growing institutional and governmental acceptance of bitcoin, likely boosting market sentiment. In the short term, expectations of new state demand could drive upward price pressure. Over the long term, integrating bitcoin into a state budget framework enhances legitimacy and may attract further institutional investment. Despite critics’ concerns over volatility and non-Bitcoin assets, the capped 10% allocation and strict custody rules mitigate risk, supporting sustained bullish momentum.