Texas Becomes First U.S. State to Buy Bitcoin in Historic Treasury Move

The move reflects the state following legislation enacted earlier in 2025, which created a dedicated "Strategic Bitcoin Reserve" to be managed by the Texas Comptroller of Public Accounts.

Under terms of the bill, Senate Bill 21, only assets with an average market capitalization of at least $500 billion, a threshold that bitcoin currently meets, may be purchased by the reserve. The bill also requires the Comptroller to issue a biennial public report on the holdings and transactions of the reserve.

The state's use of the BlackRock ETF instead of direct self-custody of bitcoin signals a cautious, compliance-driven approach. According to Lee Bratcher, while Texas does indeed plan to entrust itself in custody over time, it is currently undertaking the Request for Proposal and infrastructure steps necessary to support self-custody.

Texas has long positioned itself as a pro-crypto state, welcoming bitcoin-mining operations and passing legislation to reinforce blockchain-friendly policies. In context, the SBR is designed at least partly as an inflation hedge and diversification vehicle for the state's financial reserves. The Texas Senate Research Center, in its bill analysis, said, "bitcoin and other cryptocurrencies are assets with strategic potential for enhancing this state's financial resilience."

The timing is also opportune: The price of bitcoin had fallen substantially from previous highs, making for a “buy-the-dip” argument among the cryptocurrency’s advocates. Bratcher employed exactly that phrase in his X post: “TEXAS BOUGHT THE DIP!” The average basis of $87,000 supports that interpretation. Critics, however, warn that volatility is still intense, and that the political and fiduciary risk of public-fund bitcoin buys is significant.

By investing taxpayer funds in bitcoin through an ETF, Texas is setting a precedent that other U.S. states might soon consider. The setup allows the state to get exposure to bitcoin without the operational headache of custody in the immediate term. But that only $5 million has been spent of the allocated $10 million suggests the state is still pacing its strategy. Some reporting suggests that, while $10 million is allocated, the amount that's deployed is $5 million.

SB 21 notably provides that the Comptroller may sell, exchange, and hold cryptocurrency and enter into agreements with qualified custodians and liquidity providers, but until today Texas had not publicly identified its custody provider or the RFP process related thereto.

If Texas successfully moves into self-custody, it would be a full pioneer among states for institutional public-fund crypto holdings. Some market observers view this as part of a broader shift in public-sector asset allocation from gold, real estate, and bonds toward digital-asset exposure. For the blockchain and crypto industry, Texas's move could galvanize renewed interest in state-level digital-asset reserves.

One of the open questions is exactly how Texas will value and audit the reserve holdings: SB 21 calls for government-audit participation and biennial disclosure, but it is uncertain whether the state will publish real-time or periodic holdings and valuations. There are custodial risk and regulatory oversight issues to consider as well: how will the state govern access control, insurance, operational risk, and possible taxation of future dispositions?

Another point is the timing: Some reports cite $10 million as “purchased,” while others clarify that only $5 million was spent, with $10 million allocated. The discrepancy likely stems from the RFP and deployment schedule still being finalized.

The move by Texas echoes the earlier federal push under President Donald Trump for a U.S. national strategic bitcoin reserve, though actual federal implementation remains nascent.

Other jurisdictions such as New Hampshire and Arizona have passed crypto-reserve legislation, or proposed it, state-by-state, while Texas now claims the front-line position by actually deploying funds.

Whether the other states will follow depends on the implementation outcomes of Texas: transparency of reporting, custody reliability, risk management, political accountability, and ultimately whether the investment delivers diversification benefits.

With its $5 million bitcoin purchase through BlackRock's IBIT, Texas has broken new ground in public-fund digital-asset investment. The state's bipartisan enactment of SB 21 and its incremental deployment suggest a deliberate, compliance-first approach rather than a headline-seeking splash. Nonetheless, it positions Texas as a testbed for how public-sector treasuries can engage with cryptocurrencies.