Texas Makes a Major Bitcoin Investment, Buys $5 Million in BlackRock’s IBIT

The Texas state government has undertaken a significant investment in Bitcoin by acquiring $5 million in shares of BlackRock’s spot Bitcoin exchange-traded fund (ETF). This move underscores Texas's growing interest in Bitcoin, with future plans for self-custody of Bitcoin assets.

Key Takeaways

Texas has invested $5 million in BlackRock’s Bitcoin ETF, with plans for an additional $5 million in self-custodied Bitcoin.
Governor Greg Abbott has previously authorized the creation of a state-managed fund for holding Bitcoin as a financial asset.
Texas is exploring the possibility of including Ether in its cryptocurrency reserve, contingent on market conditions.
Wisconsin has also invested in BlackRock’s Bitcoin ETF, purchasing nearly $100 million worth of shares last year.

Texas Makes a Major Bitcoin Investment

Texas Steps into the Bitcoin Market

The Texas state government has made a noteworthy move in the cryptocurrency market by purchasing $5 million worth of shares in BlackRock’s spot Bitcoin exchange-traded fund (ETF). Another $5 million is planned for future purchases of self-custodied Bitcoin. This transaction took place on November 20 and was brought to public attention by Lee Bratcher, president of the Texas Blockchain Council, via X.

Bratcher remarked that while the Texas government is working towards self-custody of Bitcoin, the initial $5 million was allocated to BlackRock's IBIT ETF as they finalize the self-custody process. He noted, “$10 million is allocated from general revenue, but not all of it has been used yet.”

Texas Bitcoin Investment Source: Lee Bratcher

Texas's Evolving Attitude Toward Bitcoin

Pierre Rochard, CEO of The Bitcoin Bond Company, commented on Texas's investment, indicating it reflects a noteworthy shift in the state's perception of Bitcoin in a relatively short period. However, the direct relationship between this purchase and Texas’s strategic Bitcoin reserve plans remains uncertain.

In June, Governor Greg Abbott officially greenlit the creation of a state-managed fund to hold Bitcoin as part of Texas’s long-term financial assets, utilizing public funds for treasury building. According to the initial legislation approved by Abbott, only cryptocurrencies with a market capitalization over $500 billion are eligible for inclusion in the reserve. While Bitcoin meets this criterion, BlackRock's IBIT does not. Nevertheless, this investment indicates progress in Texas’s plans for Bitcoin adoption.

Future Plans for Cryptocurrency

Texas's ambitions don’t end with Bitcoin. In mid-October, Texas state Senator Charles Schwertner, one of the key lawmakers behind the Bitcoin reserve initiative, mentioned that Ether could be added to the state’s cryptocurrency reserves if it maintains a market cap above $500 billion for an extended period. Schwertner stated, “If Ethereum maintains its market cap over 24 months, it seems reasonable to consider its inclusion in the cryptocurrency reserve.”

Wisconsin’s Previous Investment

While Texas is making headlines, it is worth noting that Wisconsin's investment board had previously purchased nearly $100 million worth of shares in BlackRock’s IBIT ETF back in May 2024. This investment positions Wisconsin as one of the early adopters of Bitcoin through the IBIT ETF.

Meanwhile, Bloomberg’s senior ETF analyst, Eric Balachunas, noted that Texas joins prestigious entities like “Harvard and Abu Dhabi” in investing in IBIT, making it a notable moment for this relatively new fund, which is less than two years old.

Currently, IBIT has seen a price decline of about 10% over the year, despite the increasing governmental interest in Bitcoin, particularly during the Trump Administration. At present, IBIT is trading at $49.56, showing a slight increase of 0.22% in after-hours trading.

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