Texas Executes First Bitcoin Buy for New State Treasury Reserve

TLDR

• Texas deployed $5 million of a $10 million Bitcoin allocation through IBIT.

• The purchase marks the first Bitcoin buy by a U.S. state treasury.

• Texas plans to self‑custody its Bitcoin once its framework is complete.

• The Strategic Bitcoin Reserve was approved earlier under state law SB 21.

Texas has taken its first formal step into state‑level Bitcoin adoption. The state executed an initial $5 million purchase through BlackRock’s IBIT ETF, marking the first transaction under its Strategic Bitcoin Reserve. The move positions Texas as the first U.S. state to acquire Bitcoin for its treasury under an approved legislative framework.

Texas Begins Building Its Strategic Bitcoin Reserve

The purchase occurred on November 20 and used BlackRock’s spot Bitcoin ETF, IBIT, as the access point. The transaction formed part of a $10 million allocation authorized under SB 21, the law signed earlier this year that created a Bitcoin reserve managed by the Texas Treasury Safekeeping Trust Company. The fund joins the state’s other long‑term holdings, which include large positions in SPY and a Janus Henderson product.

Lee Bratcher, president of the Texas Blockchain Council, said the purchase was made at an average basis of roughly $87,000 per coin. He described it as the first step in deploying the full allocation and stated that Texas intends to move to a self‑custody model once the operational framework is complete.

State officials have not yet released official documentation, although the purchase is consistent with the authority granted under SB 21. Lawmakers who supported the bill argued that the state needs the ability to evaluate assets with long performance histories and use them within a diversified long‑term strategy.

A New Direction for State‑Level Bitcoin Adoption

The Strategic Bitcoin Reserve allows Texas to treat Bitcoin as a long‑term asset, similar to its existing holdings. The reserve was designed to give the treasury controlled exposure while following regulatory guidelines. The decision to begin with an ETF structure gives the state a compliant way to gain access during the early stages of the reserve’s rollout.

Texas Treasurer Kelly Hancock oversees the fund, although no formal comments have been released. The structure allows the reserve to add Bitcoin without needing immediate operational custody systems. The transition to self‑custody is expected to take place after the state establishes the security policies needed for direct asset management.

The development places Texas at the front of a national conversation on public institutions and digital assets. No other U.S. state has previously made a confirmed Bitcoin purchase for its treasury. Other entities, including university endowments and sovereign wealth funds abroad, have recently expanded their own holdings through U.S. spot ETFs.

Conditions Surrounding the Purchase

Texas purchased IBIT shares during a period of rising interest in Bitcoin ETFs among institutional holders. Recent filings showed growing positions from several large institutions. Analysts have noted that IBIT has become a common access point for entities seeking regulated exposure. Bloomberg ETF analyst Eric Balchunas said that the ETF being held by Texas, Harvard, and an Abu Dhabi wealth fund is unusual for such a new product.

The state’s decision to use an ETF for its first allocation follows the pattern observed among many U.S. institutions. ETF access gives regulated exposure while reducing custody risk during the initial phase. As the state establishes its internal systems, it intends to transfer the Bitcoin to a self‑managed structure.

The purchase takes place as Bitcoin continues to fluctuate near major levels, yet officials have emphasized long‑term positioning rather than short‑term price reactions. The reserve’s structure focuses on controlled deployment of funds rather than frequent trading activity.

Legislative Background and Next Steps

SB 21 authorized the Texas Treasury Safekeeping Trust Company to acquire Bitcoin for long‑term strategic use. Governor Greg Abbott signed the measure after extended discussions in which lawmakers argued that Bitcoin’s long multi‑year performance record should be considered within state portfolio assessments. The initial $10 million allocation was approved from general revenue, and only half has been deployed so far.

Texas is now expected to continue refining its custody and operational plans. The transition to direct storage will take place once the state finalizes its security protocols and risk procedures. The purchase indicates that the reserve program is now active and moving toward its broader goals.

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