Texas Makes History with $5 Million Bitcoin Purchase

Texas has made a significant move in the cryptocurrency space by purchasing $5 million worth of Bitcoin, specifically through BlackRock’s iShares Bitcoin Trust (IBIT). This purchase is part of a larger strategy to create a strategic Bitcoin reserve totaling $10 million. Though only a few states have introduced similar legislation, Texas’s action marks a pivotal moment in the adoption of cryptocurrencies at the state level.

Key Takeaways

Texas has acquired $5 million of BlackRock’s IBIT for a strategic Bitcoin reserve, with another $5 million set aside for future buys.
Only Arizona and New Hampshire have passed similar laws but have not yet made any official Bitcoin purchases.
Texas capitalized on the current Bitcoin market dip to establish the first state-level Bitcoin strategic reserve (SBR).
On November 25, Lee Bratcher, President of the Texas Blockchain Council, confirmed that Texas bought Bitcoin at $87,000 and has plans for self-custody of its assets.
The $10 million budget is classified as “initial funding” according to Texas’s Bitcoin bill, allowing for additional purchases before the next state budget in two years.

Texas Bitcoin

The initial allocation of $10 million for Bitcoin is part of a biennial budget, meaning Texas has the opportunity to invest the remaining $5 million in additional Bitcoin purchases before the next budget cycle.

Texas buys Bitcoin dip, makes history with $10M BTC strategic reserve

The State and Global Race to Acquire Bitcoin

Texas is one of only three U.S. states to pass a law facilitating the establishment of a strategic Bitcoin reserve. This legislation allows the state to create a special fund, overseen by the state comptroller, for investing in cryptocurrencies with a market capitalization of at least $500 billion. Arizona and New Hampshire have also implemented similar legislation but have yet to publicly disclose any Bitcoin acquisitions.

Texas Bitcoin

Other states, like Ohio, have attempted to introduce similar initiatives but have encountered immediate setbacks.

A Cautious Yet Consistent Approach

At a national level, the U.S. holds approximately 326,000 Bitcoins, estimated to be worth around $28 billion at current market prices.

Texas Bitcoin

In the last quarter, the U.S. added about 127,000 Bitcoins seized in anti-money laundering operations. However, China has made allegations that the U.S. hacked the LuBian mining pool related to these seizures.

Alongside Texas, new countries like Abu Dhabi, the Czech Republic, and El Salvador are also joining the landscape of Bitcoin investments. The UAE, in particular, has categorized Bitcoin as a strategic reserve asset, akin to gold, and has nearly tripled its Bitcoin holdings as of Q3.

As governments emerge as the third-largest holders of Bitcoin worldwide, following ETFs and public companies, their increased interest could contribute to less volatility in Bitcoin’s market. However, the relatively modest budget of $10 million for a two-year period does not equate to the level of investment seen from major treasury firms. Regardless, the combined demand from both state and national levels could support Bitcoin values in the future.