It wouldn't take much for the United States government to become an investor in bitcoin as it is in gold — the question is whether it would do its citizenry any good.

Why it matters: The idea's being touted by President-elect Trump and seems to be catching on.

Catch up quick: There are two big proposals for committing the U.S. to the world's biggest cryptocurrency, and both of them were introduced on the same day in July at the Bitcoin 2024 conference in Nashville.

• One proposal comes from Trump. The other — a juiced-up version — comes from Sen. Cynthia Lummis (R.-Wyo).
• The idea, both say, is that holding bitcoin would give the U.S. some control of an increasingly important global asset. Lummis says it could even help the country reduce its debt.

Trump's plan is for the government to keep the bitcoin that it has: 198,000 of them, valued over $19 billion, seized from criminals.

• Normally, the Marshal Service would sell it, but Trump suggests we stockpile it.

Lummis proposes that the U.S. Treasury become a buyer of 1 million bitcoin, with a commitment not to sell any for 20 years unless sold to pay down federal debt.

• Bitcoin, she argues, would complement the U.S.'s national reserve assets.

Zoom in: The U.S. is a gigantic holder of gold, with Treasury holding 8,134 tons of the commodity. (None of which serves any formal purpose — it's held over from our gold standard days.)

• Funding behind Lummis' proposal to buy a million bitcoin (valued around $100 billion at today's price) largely relies on something of an accounting trick involving that gold reserve.
• Basically, we're undervaluing our gold wildly. We've had certificates at the Fed since 1973 that say our gold is worth $42/ounce, more than $2,500 below its market price.
• By raising that valuation to current levels, Lummis argues, the U.S. Treasury could cash a check at the Fed that should be enough to buy all the bitcoin.

The other side: "It looks like you are getting something for nothing but you really aren't," Cato Institute economist George Selgin tells Axios of the Lummis plan. All the fresh cash printed to pay for the gold would end up as deposits with the Fed, deposits it (we) would pay interest on.

• Selgin also doesn't buy the debt-reduction angle. He doesn't believe the government would ever sell the bitcoin it bought — mainly because we could do that with our gold to pay down debt, but we haven't.

What he's saying: Gold investors and gold miners would go ballistic if we ever tried to sell, so we don't, Selgin says, because it would hurt the value of their holdings (probably badly).

• So, it's not hard to imagine that bitcoin investors and miners would also fight just as hard to prevent federal sales of bitcoin in 20 years.

The bottom line: Trump's simpler approach would still signal-boost the original cryptocurrency.

Go deeper

The idea of the U.S. government holding bitcoin is growing, so much so that states are starting to adopt the idea for their own treasuries.

Why it matters: Sometimes big new ideas have a way of taking hold in the states first.

Texas. The Lone Star State has the most intriguing concept: It opens up the state to accept donations of bitcoin.

• "This fund allows the state to own Bitcoin as a financial asset and for Texans to voluntarily donate Bitcoin to promote a shared ownership and community investment in Texas's financial future," the bill says.
• Zoom in: Axios Crypto suspects this idea is based on more than wishful thinking — Texas is home to most of the bitcoin mining in the U.S. The state is seen as being much more welcome to bitcoin than others.
• Texas has a complicated energy situation, and sometimes it needs a lot more power than it needs at other times (like when air conditioners come on in the summer). Bitcoin has helped justify more capital expenditure on energy.
• The comptroller is in charge of the state's BTC, and any of it that lands in its coffers has to be held for at least five years.

Pennsylvania. The main thing to understand about the Keystone State's bill is that it's dead on arrival. It was authored by two reps who did not survive their primaries and won't be returning for the new sessions.

• There are two things worth noting about this bill, however:
• The big theme is holding bitcoins as a hedge against inflation.
• It permits the state treasurer and any public retirement system to hold bitcoin.

Ohio: "A strategic bitcoin reserve fund aligns with the state's commitment to fostering innovation in digital assets and providing Ohioans with enhanced financial security," the Ohio bill, authored by State Rep. Derek Merrin says.

• It adds bitcoin to the list of property that might be seized by state law enforcement and how to dispose of it. In this case, it can be transferred to the state's bitcoin reserve fund.
• Ohio's bitcoins have to either be held by a qualified custodian or by a self-custody wallet controlled by the state treasurer.

Between the lines: No plan envisions costing taxpayers anything, though the Pennsylvania version opens the possibility of state expenditures with unclaimed property.

🧳 Morgan Stanley (that is, E-trade and Charles Schwab) is looking at offering crypto trading. (The Information)

🍫 Now Switzerland is kicking around buying bitcoin. (Reuters)

👋 Some background on Bo Hines, a former congressional candidate and Trump's pick to lead his crypto council. (DL News)

🇰🇬 Kyrgyzstan's effort to raise funds via taxing bitcoin mining diminishes each year. (24.kg)