From Hype to Halt: As Trump Backs Crypto, States Pull the Plug on Bitcoin Reserve Bills

As state-level momentum for Bitcoin treasury bills slows across the U.S., one political heavyweight continues to charge ahead on crypto—Donald Trump.

Florida’s legislative session ended quietly last week, but not without consequence for the digital asset community. Two proposed bills, HB 487 and SB 550, which would have allowed the state to allocate up to 10% of select public funds into Bitcoin, were shelved without a vote. With their indefinite postponement, Florida joins a growing list of states—among them Arizona, Oklahoma, South Dakota, and Montana—that have either rejected or abandoned efforts to build strategic Bitcoin reserves.

The retreat comes despite rising national attention around the idea of state-backed crypto reserves. Earlier this year, more than 45 Bitcoin-related treasury proposals had been introduced across over two dozen states. Today, fewer than 40 remain in play.

Arizona had come closest to adoption. One of its bills even cleared both chambers of the legislature, only to be vetoed by Governor Katie Hobbs, who called it an unnecessary risk to pension systems. “Retirement funds are not the place to experiment with untested assets,” she wrote in her veto message.

Other states like North Dakota, Montana, and South Dakota also walked back their proposals after early committee approvals, often citing concerns over Bitcoin’s volatility or lack of regulatory clarity. Utah, once considered a frontrunner, removed the digital asset provision from its blockchain legislation before passing the final bill.

Yet while states scale back their ambitions, former President Donald Trump is doubling down.

In recent weeks, Trump has positioned himself as a vocal supporter of the crypto industry. Despite increasing scrutiny from lawmakers over his family’s involvement in the TRUMP memecoin and related digital ventures, the former president is forging ahead with plans for high-profile crypto fundraising events. These include a Washington gala for major TRUMP token holders and a separate “Crypto & AI Innovators Dinner” featuring tech investor David Sacks.

Critics argue the events offer privileged access to Trump in exchange for investments in ventures tied to him or his organization. Senators Elizabeth Warren and Adam Schiff have raised red flags over possible ethical and legal conflicts, especially regarding reports that foreign entities may have invested in Trump-linked tokens like USD1, a stablecoin project allegedly backed by funds from the UAE.

Trump, for his part, has brushed off concerns. Speaking on Truth Social and in recent interviews, he emphasized his belief in the strategic value of crypto, citing the need for American leadership in the space. “If we don’t do it, China will,” he said. “It’s new, it’s popular, and it’s hot.”

While Trump claims to have no direct profit from the TRUMP token—launched days before Inauguration Day—blockchain data suggests otherwise. According to analytics from Chainalysis, insiders and affiliated wallets have accrued over $325 million in fees from token trading alone. Approximately 80% of the token’s supply is reportedly controlled by Trump-affiliated entities.

Despite the ethical questions raised, legal experts remain divided. Some see the former president’s crypto activity as ethically questionable but legally permissible. Others warn that the line between innovation and influence-peddling is becoming increasingly blurry.

As states retreat from public Bitcoin investments and political figures embrace personal crypto ventures, the U.S. remains divided in its approach to blockchain policy. Whether Trump’s bold crypto pivot marks the start of a new wave—or just a headline-grabbing outlier—remains to be seen.