Texas becomes the first US state to officially purchase bitcoin

Key points:

• Texas has invested $5 million in BlackRock’s BTC ETF.
• This year, the state has allocated $10 million to form a strategic bitcoin reserve.
• Other states are also taking steps to create similar reserves, but Texas may be the first to launch full-fledged long-term investments in bitcoin.

Texas is close to creating the first state crypto reserve in the US. Last week, Texas invested $5 million in BlackRock’s iShares Bitcoin Trust (IBIT). These funds are not a direct purchase of bitcoin: the ETF has been chosen as a temporary instrument while the state finalizes its contract with a custodian and the process of purchasing digital assets. The investment is part of the work on the Texas strategic bitcoin reserve.

Sourse: X.com

The state has already asked the crypto industry for recommendations on the structure of storage and management of the future reserve. The deadline for submitting proposals expired last month. At the beginning of the year, lawmakers allocated $10 million to launch the reserves and required agencies to prepare the legal and technical infrastructure.

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How Texas plans to form its crypto reserve

The investment in ETFs was a temporary measure to get the ball rolling before signing a contract with a custodian. According to representatives of the Texas Department of Finance, investing in ETFs allows the state to maintain its bitcoin position while the request for proposals for selecting a custodian is being finalized.

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Other states have already invested in cryptocurrency ETFs, but exclusively through retirement funds. Michigan formed such positions earlier, and Wisconsin sold its $350 million stake in May. However, no state has yet created its own strategic bitcoin reserve — Texas may be the first.

New Hampshire has also passed a law to create a bitcoin reserve, but work on the project is progressing slowly. State officials said no steps have been taken yet. Instead, authorities are considering issuing $100 million in bitcoin bonds to finance an economic development fund. In Arizona, lawmakers this year allowed unclaimed crypto assets to be directed to their own reserve.

Texas Blockchain Council President Lee Bratcher noted that the state “bought the dip” by acquiring ETFs at around $87 000 per BTC after it fell from peaks above $120 000. According to him, Texas is setting an example for other regions and accelerating the adoption of cryptocurrencies at the state level.