Texas officially purchased $5 million worth of Bitcoin through BlackRock's iShares Bitcoin Trust on November 20, becoming the first US state to hold Bitcoin as a reserve asset. The state acquired the position at approximately $87,000 per Bitcoin while exchange-traded fund markets experienced outflows and institutional caution spread across the sector.
The purchase represents the initial deployment of a $10 million allocation approved under Senate Bill 21, which Governor Greg Abbott signed into law on June 22, 2025. Texas Treasury Safekeeping Trust Company executed the transaction through the IBIT ETF structure while finalizing custody arrangements for direct Bitcoin holdings. Lee Bratcher, president of the Texas Blockchain Council, confirmed the state plans to transition from ETF exposure to self-custodied Bitcoin once infrastructure requirements are met.
State Reserve Strategy Targets Long Term Returns
The move reflects a multi-decade investment approach rather than short-term speculation. The comptroller's office can now buy, hold, manage and sell Bitcoin using legislature-approved funds under the Texas Strategic Bitcoin Reserve and Investment Act. The legislation requires any cryptocurrency purchased to maintain a 24-month average market capitalization above $500 billion, limiting eligible assets to Bitcoin at current valuations.
Texas holds approximately $667 million in S&P 500 ETF holdings and $34 million in other investment funds. The $5 million Bitcoin position represents less than one percent of total state investment portfolio assets. Bratcher stated Texas views the allocation as positioning for decades ahead, not responding to current price movements or quarterly performance metrics.
In February 2025, 15 US states introduced legislation to establish Bitcoin reserves, with proposals ranging from 5% to 10% of public funds allocated to digital assets. Pennsylvania led state-level Bitcoin reserve initiatives in November 2024, followed by Alabama, Arizona, Florida, Kentucky, Massachusetts, Montana, New Hampshire, North Dakota, Ohio, Oklahoma, South Dakota, Utah and Wyoming. Most legislation stalled or failed as Bitcoin prices declined through mid-2025.
Government Bitcoin Holdings Reshape Digital Asset Policy
Texas avoided pure Bitcoin stakes by using the ETF structure, which removes direct custody requirements during the implementation phase. Michigan and Wisconsin pension funds previously invested in cryptocurrency ETFs, but those purchases served retirement obligations rather than state treasury strategy. Wisconsin sold its $350 million BlackRock ETF position in May 2025.
The Texas purchase follows President Trump's March 2025 executive order establishing a federal Strategic Bitcoin Reserve using forfeited assets from criminal proceedings. Senator Cynthia Lummis introduced the BITCOIN Act proposing acquisition of one million Bitcoin over five years. New Hampshire and Arizona enacted state Bitcoin reserve laws in May and July 2025, though Arizona's legislation restricts purchases to seized assets only.
Representative Giovanni Capriglione, who co-authored Senate Bill 21, described the measure as recognizing digital assets as strategic opportunity rather than temporary trend. Critics including Marquette University finance professor David Krause warn Bitcoin remains highly volatile compared to traditional reserve assets. The comptroller's office has not released detailed transaction records or custody implementation timelines.
The purchase positions Texas as the first state with direct Bitcoin exposure through public treasury operations. Whether other states resume reserve legislation depends on Bitcoin price stability and federal regulatory clarity. Texas allocated half its approved $10 million budget, leaving additional capital for future purchases under current legislative authority.