Texas Officially Launches Cryptocurrency Reserve with $5 Million Bitcoin Investment
The State of Texas has made history by becoming the first U.S. state to officially launch a cryptocurrency reserve, initially investing $5 million in Bitcoin as part of its newly authorized Texas Strategic Bitcoin Reserve. This milestone move was confirmed on November 20, 2025, through a purchase of Bitcoin via the BlackRock iShares Bitcoin Trust (IBIT) exchange-traded fund (ETF).
Background and Legislative Process
The Texas Strategic Bitcoin Reserve was established through Senate Bill 21 (SB 21), authored by Senator Charles Schwertner and co-written by Representative Giovanni Capriglione. The legislation was designed to authorize the state government to buy and hold cryptocurrency assets as part of a strategic reserve. The bill requires that any cryptocurrency purchased must have a market capitalization averaging at least $500 billion over the past 24 months, thereby focusing on major, stable digital currencies.
The bill passed the Texas Senate with a vote of 25 to 5 in March 2025 and was subsequently approved by the House of Representatives in May 2025 with a vote of 101 to 42. Governor Greg Abbott signed SB 21 into law on June 22, 2025, making Texas the third state, after Arizona and New Hampshire, to establish an official state-level cryptocurrency reserve.
The First Investment and Its Implications
Texas’s initial investment represents a modest $5 million allocation from a $10 million fund dedicated to the reserve. Although this amount is small relative to Texas’s overall $338 billion budget, it underscores the state’s strategic interest in supporting and legitimizing the cryptocurrency sector. The purchase of Bitcoin came at a price of around $87,000 per coin and was made through an ETF managed by BlackRock, signaling a cautious and regulated approach to the investment.
According to Kevin Lyons, a representative from the Texas Comptroller’s Office, the ETF acquisition serves as a “placeholder investment” while the state completes the process of contracting with a designated cryptocurrency custodian. The comptroller’s office is currently reviewing responses to its request for information with plans to select an official custodian soon.
Industry and Public Reactions
The establishment of the Texas Strategic Bitcoin Reserve has drawn mixed reactions. Supporters argue the move is an important endorsement of the cryptocurrency industry’s growing role in finance and innovation. They highlight that the investment serves as both a strategic asset reserve and a signal that Texas is open to technological advances in the financial sector.
Critics, including some financial academics like University of Texas finance professor John Griffin, view the move less favorably. Griffin remarked that the decision contradicts certain conservative values such as limited government involvement in market speculation, noting the irony of government entities engaging in asset speculation by investing public funds in volatile markets.
Context Within the Broader Cryptocurrency Landscape
The Texas Strategic Bitcoin Reserve mirrors previous federal initiatives, including the executive order creating a strategic bitcoin reserve under former President Donald Trump. By adopting a similar approach, Texas aims to position itself at the forefront of cryptocurrency adoption among U.S. states. This initiative aligns with Texas’s broader efforts to foster blockchain technology and cryptocurrency business growth within its borders, furthering its image as a crypto-friendly state.
With Bitcoin prices experiencing fluctuations, the timing of the purchase during a market downturn was seen by some as an opportunity to acquire assets at a favorable cost. As the reserve matures, the state may adjust its holdings and investment strategies based on market conditions and legislative directives.
Next Steps
The Texas Comptroller’s Office continues to formalize the cryptocurrency reserve’s operational framework, including the appointment of a custodian and potential expansion of investment assets in accordance with legislative guidelines. Lawmakers and state officials are also likely to monitor the reserve’s performance and impact over time to inform future decisions.
Texas’s pioneering move to officially hold Bitcoin in a state-managed reserve marks a significant moment in the intersection of state finance and digital assets, setting a precedent that may encourage other states to follow suit.
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