Bitcoin Was Built to Check Government Power—Not Expand It

State Bitcoin Reserve Proposals

Bitcoin is one of the most important monetary innovations in a generation. It gives individuals a censorship-resistant alternative to government-controlled money, a fixed supply no central bank can dilute, and the ability to hold and transfer value without the permission of any intermediary. From a liberty standpoint, that is profoundly good.

So let me be clear: I support Bitcoin. What I oppose is the growing movement to have government buy and hold it as a “strategic reserve asset.” Those of us who genuinely value both sound money and limited government should oppose it too.

The argument for state Bitcoin reserves sounds appealing. Proponents call it a hedge against inflation, a signal of financial innovation, a way to position states for a decentralized future. Some frame it as monetary sovereignty. But strip away the framing, and the question is simple: Should your state government be in the business of making investment decisions with taxpayer money?

The answer should be no—not because Bitcoin is too risky (private citizens are free to take risks with their own funds), but because government should not be a market actor at all. When a state buys Bitcoin hoping it will appreciate, that is not a reserve strategy. A reserve is about liquidity and stability. What proponents are describing is a portfolio decision—a bet on future price performance. Call it what it is: speculation with public funds.

Once lawmakers accept that logic, there is no limiting principle. If appreciation justifies buying Bitcoin, why not equities? Why not tech funds, real estate, or venture capital? Every asset class has a compelling long-term story. The moment government enters the investment business, the argument that it should invest only in Bitcoin becomes very hard to defend.

There is also the asymmetry of risk. In private markets, gains and losses fall on those who voluntarily took the position. In government, politicians take credit for gains and taxpayers absorb the losses—or the foregone alternatives. That is not market discipline. That is moral hazard financed by people who had no say in the matter.

Here is the deeper problem. A government actively seeking assets to purchase is a government that already assumes it has a legitimate claim to more money than it needs. If the state has surplus revenue, the proper response is not to build a portfolio. The proper response is to cut taxes, reduce spending, pay down obligations, and return resources to the private economy. State Bitcoin reserves become an excuse to avoid the harder reforms that actually matter.

Sound money matters because it limits government power. It disciplines politicians, restrains manipulation, and protects the public from the quiet theft of inflation. But adding Bitcoin to a state treasury does not restrain government—it expands its financial footprint, introduces new discretionary authority, and invites exactly the kind of political maneuvering that sound money is supposed to prevent.

Bitcoin was created as an alternative to government-managed money. It is a check on state power, not a new instrument of it. We should protect that distinction—and resist every effort, however well-intentioned, to blur it.