HUYETT: Ammon’s Bitcoin Reserve Bill Will Make NH a Tech Leader #CriptoNews

The moment Donald Trump’s election became clear, Wyoming U.S. Sen. Cynthia Lummis tweeted, “WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE.” Lummis is the sponsor of a federal bill, the “BITCOIN Act of 2024,” which has received a nod from Trump—and which supporters argue could help pay down the national debt.

Under Lummis’ bill, the secretary of the treasury would purchase 1 million Bitcoin—about 100 billion U.S. dollars—and hold it for not less than 20 years. Matthew Sigel, a leading researcher at VanEck, has calculated that if U.S. debt grows at five percent, Lummis’ reserve will pay down 36 percent of all U.S. national debt in 2050 if Bitcoin compounds at 25 percent. This may be a conservative estimate. Over the last 10 years, Bitcoin has had an average annual return of 77 percent.

Inspired by Lummis’ bill, New Hampshire state Rep. Keith Ammon has introduced a bill to create a Bitcoin strategic reserve in New Hampshire. Under Ammon’s more modest billthe state treasurer would be empowered to invest not more than 10 percent of public funds in Bitcoin. Unlike the federal BITCOIN Act, however, Ammon’s bill is enabling legislation that would not mandate the purchase of any assets.

A real-life example of a strategic Bitcoin reserve can be seen in El Salvador—a longstanding international partner of New Hampshire’s National Guard. After President Nayib Bukele began purchasing Bitcoin in 2021, El Salvador’s Bitcoin assets experienced a 122 percent increase in value, with unrealized gains in the hundreds of millions. Had Bukele purchased U.S. treasury bonds instead, El Salvador would have lost value as inflation outpaced the yield on the bonds.

During a House Commerce hearing on Ammon’s bill, one legislator pressed him on the volatility of Bitcoin—pointing out that it lost three-quarters of its value in 2022. In other words, New Hampshire shouldn’t buy Bitcoin because it’s a bad investment.

Yet, at the federal level, critics of Lummis’ bill make essentially the opposite claim. Writing in the Financial Times, scholar Brendan Greeley said he opposes a federal Bitcoin reserve precisely because it will hasten Bitcoin’s appreciation—enriching the U.S. government and Bitcoin owners. Greeley objects to that because, he claims, Bitcoin’s growth at the expense of the U.S. dollar will limit the federal government’s control over the economy.

Whatever the merits of these arguments against Lummis’ bill, they underscore the strength of Ammon’s. New Hampshire is not, like the U.S. government, an issuer of its own currency—it is an investor like a firm or a household. And it has a duty to make the wisest investments it can with the money it collects in taxes.

Even according to Lummis’ critics, New Hampshire would benefit if it purchases Bitcoin, would benefit more the sooner it buys, and would benefit most if Trump and Lummis follow through on their federal reserve. Under Ammon’s HB 302, New Hampshire would have more to invest in its communities, would mark itself as a first-in-the-nation innovator, and would signal to the technology sector that we are stepping into a new era.

Under Bukele’s innovative style of leadership, our partners in El Salvador have risen from a den of crime to an emerging first-world nation—with many commentators calling the country “the next Singapore.” That kind of dramatic transformation is every bit as attainable here. New Hampshire is the same size as El Salvador and, despite our quaint and sleepy reputation, has three times El Salvador’s GDP. With New Hampshire’s distinct political climate and proximity to Boston’s tech industry, we are uniquely positioned to unlock our own Singaporean revolution and reshape the political economy of New England.