Texas Launches State Bitcoin Reserve with $5 Million IBIT Purchase: A Historic Move

Texas has made history as the first U.S. state to allocate public funds to a Bitcoin reserve, reportedly purchasing $5 million worth of BlackRock’s iShares Bitcoin Trust (IBIT) ETF on November 20, 2025. This initial investment represents the opening step in the Texas Strategic Bitcoin Reserve, established under Senate Bill 21 (SB 21) signed by Governor Greg Abbott in June 2025.

The Purchase: $5 Million IBIT Allocation from $10 Million Budget

The transaction, confirmed by the Texas Blockchain Council, deploys $5 million from a $10 million pilot allocation authorized by SB 21. Executed through IBIT at an average price of approximately $87,000 per Bitcoin, the buy marks Texas’s inaugural foray into digital asset reserves. The Texas Treasury Safekeeping Trust Company, which manages the state’s financial assets, oversees the reserve as a segregated fund outside the general treasury.

Lee Bratcher, president of the Texas Blockchain Council, described it as “the first Bitcoin buy by a U.S. state treasury.” The move treats Bitcoin alongside traditional long-term holdings, such as nearly $700 million in SPDR S&P 500 ETF Trust (SPY) and $34 million in Janus Henderson funds.

• Investment Amount: $5 million via IBIT ETF.
• Bitcoin Equivalent: ~57.5 BTC at $87,000 average.
• Budget Source: $10 million from general revenue under SB 21.

SB 21: The Legislation Enabling the Reserve

Senate Bill 21, the Texas Strategic Bitcoin Reserve and Investment Act, creates a special fund administered by the Texas Comptroller of Public Accounts. It authorizes the purchase and holding of cryptocurrencies with an average market cap of at least $500 billion over the prior 12 months—effectively limiting it to Bitcoin under current conditions. The reserve can be financed through legislative appropriations, revenue streams, investment proceeds, and cryptocurrency donations.

Lawmakers framed the reserve as a hedge against inflation and a diversification tool for the state’s $60 billion+ Permanent School Fund. It requires biennial reporting on holdings and valuations, with a five-member advisory committee providing guidance. The bill passed the Senate unanimously and the House with bipartisan support, reflecting Texas’s leadership in crypto policy.

• Eligibility: Cryptos with $500B+ average market cap.
• Administration: Texas Comptroller; advisory committee.
• Reporting: Biennial updates on holdings and performance.

Broader Context: Institutional and Sovereign Bitcoin Adoption

Texas joins a growing list of institutions embracing Bitcoin as a reserve asset:

• Harvard University: Tripled IBIT holdings to $442.8 million in 2025.
• Abu Dhabi’s Al Warda Investments: Expanded ETF positions significantly.
• El Salvador: Holds 7,474 BTC as legal tender since 2021.

The purchase aligns with Texas’s crypto-friendly environment, including the Texas Blockchain Council and initiatives like the state’s first Bitcoin mining facility powered by renewables. It positions the Lone Star State as a pioneer in sovereign digital asset strategies, potentially influencing other U.S. legislatures.

Implications and Next Steps

While the $5 million buy is modest relative to Texas’s $60 billion endowment, it establishes a framework for future allocations. Officials plan to transition to self-custody once operational guidelines are finalized, emphasizing long-term holding over short-term trading. The reserve’s structure prioritizes diversification and inflation hedging, with no immediate plans for sales.

In summary, Texas’s $5 million IBIT purchase on November 20, 2025, inaugurates the nation’s first state-run Bitcoin reserve under SB 21, treating BTC as a strategic asset alongside traditional holdings and signaling growing sovereign interest in digital reserves.