Key Takeaways
- The Texas Strategic Bitcoin Reserve made its first purchase via BlackRock’s IBIT ETF.
- The state plans to transition from ETF holdings to direct self-custody of bitcoin.
- Texas’ move positions it as the frontrunner in government-level bitcoin adoption, potentially influencing other states.
Texas has made U.S. history by becoming the first state government to buy bitcoin for its treasury. The state purchased $5 million worth of bitcoin on November 20 through BlackRock’s spot Bitcoin ETF, known as IBIT.
The announcement was made on X by Lee Bratcher, president of the Texas Blockchain Council. Bratcher confirmed the news and said officials had been “diligently monitoring the market” before proceeding with the purchase.
He initially stated that $10 million worth of bitcoin had been bought, but later clarified that while $10 million had been allocated, the actual purchase totaled $5 million.
This marks the beginning of Texas’s new Strategic Bitcoin Reserve, a project designed to hold bitcoin as a long-term state asset.
Many states have talked about holding bitcoin, but Texas is the first to actually buy any using state money. With this move, Texas is now the frontrunner in government-level bitcoin adoption, and experts believe other states may follow.
According to Bratcher, Texas bought its bitcoin at an average price of about $87,000 per coin. He also explained that the ETF is only a temporary solution, saying, “Texas will eventually self-custody bitcoin, but while that RFP process takes place, this initial allocation was made with BlackRock’s IBIT ETF.”
This means Texas plans to hold its own bitcoin directly in the future, instead of through a fund.
The plan for a bitcoin reserve began last year when lawmakers started exploring how the state could legally buy and hold bitcoin. In June, Governor Greg Abbott signed a new law officially creating the Texas Strategic Bitcoin Reserve.
The legislation had wide support. Advocates said bitcoin could help strengthen the state’s long-term financial position. The reserve is also kept separate from normal state spending, which protects it from routine budget changes.
Earlier ideas for the reserve included requiring long-term cold storage, yearly audits, and even allowing residents to donate bitcoin. The concept was similar to federal proposals supported by Donald Trump and Senator Cynthia Lummis.
Other states, like Arizona and New Hampshire, have explored similar Bitcoin plans. New Hampshire recently approved a bitcoin-backed bond, and Arizona has studied digital asset reserves. But Texas is the only state so far to actually buy bitcoin with government funds.
Texas made its purchase during a drop in bitcoin’s price. The price recently fell from above $120,000, and some public figures said this made the timing smart.
Even though bitcoin can be volatile, supporters say it remains a strong long-term investment. Texas seems to agree, noting that this reserve is meant for long-term value, not short-term trading.
The state is now working on choosing a custodian and building the systems needed to safely store bitcoin itself. Once that process is finished, the state plans to move from holding the ETF to directly owning bitcoin in self-custody.
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