The state of Texas has purchased about $5 million in bitcoin through a BlackRock-administered exchange-traded fund, marking one of the first publicly funded cryptocurrency transactions by a state government. The move follows the implementation of Senate Bill 21, which authorized the Texas comptroller’s office to create a strategic cryptocurrency reserve. The investment places Texas ahead of other states that have passed similar legislation. New Hampshire and Arizona approved crypto reserve measures, and pension funds in Wisconsin and Michigan have also bought digital assets. Texas, however, is the first to allocate state dollars directly into a crypto reserve.
Texas made the purchase through BlackRock’s iShares Bitcoin Trust ETF, a fund that tracks the price of bitcoin while trading in U.S. dollars. On Monday afternoon, the ETF traded around $48, reflecting a drop of about 20% over the past month and 13% since the start of the year. Bitcoin prices have mirrored that volatility, falling from record highs above $126,000 in early October to about $85,000 on Monday, the lowest level since April.
The state executed its purchase late last month at a price near $87,000 per bitcoin, according to information shared publicly by industry representatives. The comptroller’s office has not confirmed the exact price paid but described the ETF acquisition as a temporary measure until the agency contracts with a designated cryptocurrency custodian. Officials are currently reviewing responses to a request for information and plan to award a formal contract at a later date. Lawmakers have allocated $10 million for the reserve, representing a small portion of the state’s $338 billion budget. Supporters of the initiative have framed the move as an investment in an expanding sector that could generate long-term economic benefits, including job growth and increased tax revenue.
Critics, including economists and fiscal watchdogs, have raised concerns about the risks associated with publicly funded cryptocurrency holdings. Opponents argue that the legislation reflects industry lobbying more than sound fiscal policy and warn that state involvement in digital assets could expose public funds to unnecessary volatility. They also point to longstanding issues within the crypto sector, including fraud, unstable valuations and high energy consumption.
Despite those concerns, Texas has continued to position itself as a national hub for digital asset activity, particularly in bitcoin mining. State leaders have promoted the industry as a growth opportunity, even as the broader crypto market experiences significant fluctuations.
