The Texas state government has made a significant investment in Bitcoin, acquiring $5 million worth of shares in BlackRock’s spot Bitcoin exchange-traded fund (ETF). An additional $5 million is earmarked for a self-custodied Bitcoin purchase.
This move was executed on November 20 and was brought to public attention on Tuesday by Lee Bratcher, president of the Texas Blockchain Council, via an X post.
Bratcher explained that while the Texas government intends to eventually "self-custody Bitcoin," the initial $5 million allocation was made through BlackRock's IBIT ETF as the self-custody process is still being finalized. He further stated that $10 million has been allocated from the general revenue, though not all of it has been deployed yet.
Commenting on Texas's investment, Pierre Rochard, CEO of The Bitcoin Bond Company, suggested that this action signifies a substantial change in attitudes towards Bitcoin over a short period. Rochard remarked:
“In five years we went from ‘governments will ban bitcoin’ to ‘governments are only buying a small amount of bitcoin’. Hyperbitcoinization has happened, is happening, and will continue to happen.”
It remains unclear whether this recent investment is directly linked to the state's broader strategy for a strategic Bitcoin (BTC) reserve.
In June, Governor Gregg Abbott officially authorized the creation of a state-managed fund to hold BTC as part of the state’s long-term financial assets, utilizing public funds for the treasury. The initial bill greenlit by Abbott stipulated that only assets with a market capitalization exceeding $500 billion are eligible for inclusion in the reserve. Bitcoin meets this criterion, but BlackRock’s IBIT ETF does not.
Nevertheless, this investment represents a notable advancement in Texas's plans for BTC adoption.
Texas's interest in digital assets may extend beyond Bitcoin. In mid-October, Texas State Senator Charles Schwertner, who was instrumental in the state's strategic Bitcoin reserve bill, indicated to Cointelegraph that Ethereum (ETH) could be the next asset considered, provided its market capitalization consistently remains above $500 billion.
Schwertner stated, "If Ethereum maintains its market cap over 24 months, I think it’s reasonable and prudent to give direction that Ethereum could be added to the cryptocurrency [reserve]."
Wisconsin Invested $100 Million in BlackRock's BTC ETF in 2024
While some reports suggest Texas is the first state to invest in BTC through IBIT, filings indicate that the State of Wisconsin's investment board oversaw the purchase of nearly $100 million worth of IBIT shares in May of the previous year.
Eric Balachunas, Senior ETF Analyst at Bloomberg, also pointed out via X on Tuesday that Texas now joins institutions like Harvard and Abu Dhabi in recently acquiring IBIT shares.
Balachunas commented, "Pretty sure that’s the only ETF to ever be owned by all three. More wild stuff for a not-yet-even-two-years-old fund."
Despite the increasing acceptance of Bitcoin by governmental entities in the U.S. this year, IBIT has experienced a decline of approximately 10% year-to-date. At the time of reporting, IBIT was trading at $49.56, showing a modest increase of 0.22% in after-hours trading.