This year's rapid surge in U.S. states' interest to put public money into cryptocurrencies before the federal government can establish a strategic reserve of digital assets has encountered mixed results after five such efforts flamed out, though Utah remains a single vote away from the finish line and Texas reportedly advanced a bill to its state Senate.

Pennsylvania, Wyoming, Montana, South Dakota and North Dakota have fallen short of the mark in legislative efforts to put public money into crypto. Others — most notably Utah — have made significant progress toward passing bills that could tie their financial health to the digital assets markets, and the ground is shifting by the hour.

The U.S. Congress and President Donald Trump have made noise about a federal strategic digital assets reserve, with the idea's public campaign stemming from the Bitcoin 2024 stage in Nashville, Tennessee, back before Trump won his election and Republicans rose to the majorities in Congress. Trump has spoken broadly in favor of the notion, which has also been more aggressively advocated by MicroStrategy's Michael Saylor and pitched by Senator Cynthia Lummis, the Wyoming Republican who helms the crypto subcommittee of the Senate Banking Committee.

Many of the states raced to beat the feds to the punch, but in the weeks that have marked this trend, the market value of the asset most of the efforts are talking about — bitcoin (BTC) — has slipped considerably from the post-election euphoria that seemed to spur enthusiasm.

Read More: U.S. Bitcoin Reserve May Be Coming, But States Are Winning the Race

The drop in price to about $83,000 from a Trump inauguration-day high of $106,000 has been coupled with another high-profile exchange hack at Bybit that reportedly made off with more crypto than thieves have ever previously snatched in one outing. These setbacks may have further dampened the goodwill of state-government enthusiasts.

"That sense of urgency appears to have abated now," said Johnny Garcia, a managing director at VeChain Foundation who has been following the state actions. "My view is states have some breathing room to assess and to contemplate a way forward."

Montana and North Dakota saw clear losses when their legislatures considered the idea of state-level crypto reserves. Both legislatures voted to reject the bills. The other three states where the initiatives failed saw those rejections happen at the committee level.

Meanwhile, Utah's legislation to allow the crypto investment of up to 5% of certain public accounts has cleared the state house and a senate committee on its way to consideration by the entire senate there. But getting that vote is never a certainty in the limited windows most states give to their legislative activity.

"Although Utah seems best positioned to finalize its bill first, nothing is guaranteed," said Dennis Porter, CEO of the Satoshi Action Fund that's pushed for states to embrace bitcoin reserves. "It's a dynamic process."

Porter said the campaign in the states is leaning on them as the "laboratory of democracy." He posted on social-media site X (formerly Twitter) that most of the bills will fail, which is "normal" for the process, which his group will continue pursuing each year.

Texas, a major bitcoin mining hub, reportedly became the latest state legislature to move a crypto reserve bill out of committee. But the states have pursued such a wide variety of digital assets initiatives that they're difficult to pin down as a common effort. And some states are moving on other aspects of crypto involvement, such as Indiana's house-passed bill weighing blockchain for government efficiency and Arizona advancing a technical bill through its house that would keep unclaimed property in crypto form, rather than converting it to cash — an outcome that would involve managing it in a state fund.

While North Dakota's effort to set up a reserve failed, the state house also approved a separate resolution that encourages its treasurer to invest certain state funds in digital assets. That resolution is now in the hands of the state senate.

Garcia predicted that "many of these states will likely authorize digital assets as part of their state pension and investment options before moving toward more aggressive digital asset reserves."

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