On November 20, Texas emerged as the inaugural U.S. state to invest in Bitcoin for its Strategic Reserve, purchasing $5 million at an approximate rate of $87,000 per BTC, as reported by Lee Bratcher, President of the Texas Blockchain Council.

This acquisition was executed through BlackRock’s iShares Bitcoin Trust (IBIT), while the state progresses towards establishing self-custody for its holdings.

This development underscores a rising interest at the state level in utilizing Bitcoin as a reserve asset. Texas had previously considered strategic Bitcoin legislation the prior year, with the objective of creating a Bitcoin reserve independent of taxpayer funding.

In June of this year, the Texas governor enacted legislation aimed at creating a state Strategic Bitcoin Reserve.

Institutional investors are increasingly adopting similar strategies. For instance, Harvard University’s endowment recently tripled its IBIT holdings to $442.8 million, marking it as the university’s most significant publicly disclosed investment.

Additionally, Emory University and Abu Dhabi’s Al Warda Investments have also substantially augmented their Bitcoin ETF exposure.

Bitcoin is currently trading near $87,500, approximately 30% lower than its all-time high. This news was first disclosed by Lee Bratcher.

“Texas will eventually transition to self-custody for Bitcoin,” Bratcher stated, “but while that RFP process is underway, this initial allocation was made via BlackRock’s IBIT ETF.”

As the President and Founder of the Texas Blockchain Council, an industry association representing over 100 member companies and numerous individuals, Bratcher advocates for Texas as a prominent hub for Bitcoin and blockchain innovation. He played a pivotal role in championing the state’s Bitcoin reserve legislation, actively guiding it through the state Senate.

Texas is Not Alone in Its Interest in Bitcoin Purchases

Last year, Texas State Representative Giovanni Capriglione introduced a bill to establish a Strategic Bitcoin Reserve within the state.

The proposed legislation outlined that the state would purchase and retain Bitcoin as a strategic asset, store it in cold storage for a minimum of five years, permit resident donations, and allow state agencies to accept and convert cryptocurrencies into Bitcoin.

Furthermore, the bill mandated transparency through annual audits and reports. Modeled after a federal proposal by President Donald Trump and Senator Lummis, the legislation reflects the growing global interest in Bitcoin.

Earlier this month, New Hampshire achieved a notable milestone as the first government worldwide to endorse a $100 million Bitcoin-backed municipal bond. The state’s Business Finance Authority (BFA) approved the conduit bond, enabling private companies to borrow against over-collateralized Bitcoin held in custody, with repayment risks tied exclusively to the collateral.

Borrowers must provide approximately 160% of the bond’s value in Bitcoin, and automated liquidation processes are in place to protect bondholders in the event of value declines. The fees and any appreciation in Bitcoin will finance the state’s Bitcoin Economic Development Fund.

This initiative follows the establishment of Strategic Bitcoin Reserves in both New Hampshire and Arizona.

Source link