On November 20, Texas made a big move by becoming the first state in the U.S. to scoop up Bitcoin for its Strategic Reserve. They bought a whopping $5 million worth at around $87,000 per BTC, thanks to insights from Lee Bratcher, the President of the Texas Blockchain Council.
The purchase took place through BlackRock’s iShares Bitcoin Trust (IBIT), all while Texas works on plans for self-custody of the asset.
This exciting step highlights how states are becoming more interested in using Bitcoin as a reserve asset. Last year, Texas explored strategic Bitcoin legislation to set up a reserve without tapping into taxpayer dollars.
In June, the Texas governor signed the new law into action, officially creating the state’s Strategic Bitcoin Reserve.
But it’s not just Texas; institutional investors are jumping on the bandwagon too! Harvard University’s endowment recently tripled its holdings in IBIT, now totaling $442.8 million, making it the university’s biggest publicly known investment.
Plus, Emory University and Abu Dhabi’s Al Warda Investments are also boosting their Bitcoin ETF investments.
Currently, Bitcoin is trading at about $87,500, which is around 30% lower than its all-time high. Lee Bratcher was the first to break this exciting news!
“Texas will eventually manage its Bitcoin on its own,” Bratcher noted, “but while we sort that out, this initial acquisition was made through BlackRock’s IBIT ETF.”
Bratcher, who is the President and Founder of the Texas Blockchain Council, leads an industry group with over 100 member companies and a wide array of individuals advocating for Texas as a standout hub for Bitcoin and blockchain innovation.
He has been a passionate advocate for the state’s Bitcoin reserve legislation, working diligently to guide it through the state Senate.
Texas isn’t the only state keen on Bitcoin
Last year, in the legislation put forward by Texas State Representative Giovanni Capriglione, the proposal was to set up a Strategic Bitcoin Reserve for the state.
The legislation suggested that the state could buy and hold Bitcoin as a strategic asset, securely store it for at least five years, welcome donations from residents, and let state agencies accept and convert cryptocurrencies into Bitcoin.
Transparency was a key focus, with plans for yearly audits and reports. It drew inspiration from a federal proposal by President Donald Trump and Senator Lummis, reflecting the growing global interest in Bitcoin.
Earlier this month, New Hampshire became the first government globally to greenlight a $100 million Bitcoin-backed municipal bond. The state’s Business Finance Authority (BFA) authorized this bond, enabling private firms to borrow against over-collateralized Bitcoin held in custody, with the repayment risk pinned solely on the collateral.
Borrowers will need to provide about 160% of the bond’s value in Bitcoin, and automated liquidation safeguards bondholders in case of value dips. Fees and any BTC value increases will fund the state’s Bitcoin Economic Development Fund.
This exciting move follows the earlier creation of a Strategic Bitcoin Reserve in New Hampshire and Arizona.
