On November 20, Texas made a historic move by becoming the first U.S. state to acquire Bitcoin for its Strategic Reserve, investing $10 million in BlackRock”s iShares Bitcoin Trust (IBIT) at an approximate rate of $87,000 per BTC. This acquisition reflects an increasing trend among states to view Bitcoin as a strategic reserve asset.
According to Lee Bratcher, President of the Texas Blockchain Council, the state is in the process of establishing a self-custody plan for its Bitcoin holdings. This purchase is part of a broader initiative that began last year when Texas sought to develop legislation for a Bitcoin reserve without relying on taxpayer money. The governor of Texas signed the necessary legislation into law in June, paving the way for the creation of a state Strategic Bitcoin Reserve.
The interest in Bitcoin as a reserve asset is not limited to Texas. Notably, Harvard University has recently tripled its holdings in BlackRock”s Bitcoin ETF to $442.8 million, marking it as the university”s largest publicly revealed investment. Other institutions, such as Emory University and Al Warda Investments from Abu Dhabi, are also ramping up their exposure to Bitcoin ETFs.
Currently, the price of Bitcoin is hovering around $87,500, which is roughly 30% lower than its all-time high. Bratcher stated, “Texas will eventually self-custody bitcoin,” adding that this initial allocation was made through BlackRock”s IBIT ETF while the state”s Request for Proposal (RFP) process for self-custody is underway.
The Texas Blockchain Council, which Bratcher founded, aims to position Texas as a key player in Bitcoin and blockchain innovation, advocating for policies that foster growth in this sector. The legislation introduced last year by Texas State Representative Giovanni Capriglione proposed to create a Strategic Bitcoin Reserve that would allow the state to purchase and securely store Bitcoin for at least five years, accept resident donations, and enable state agencies to transact in Bitcoin.
This legislative framework was designed to enhance transparency, mandating annual audits and reports. It was modeled after a federal proposal from President Donald Trump and Senator Cynthia Lummis, reflecting a global surge in interest surrounding Bitcoin.
In a related development, New Hampshire recently made headlines by approving a $100 million Bitcoin-backed municipal bond, marking the first instance of a government utilizing Bitcoin as collateral for municipal financing. The state”s Business Finance Authority authorized this innovative conduit bond, allowing private enterprises to borrow against Bitcoin held in custody, with borrower obligations backed by over-collateralized Bitcoin.
With states like Texas and New Hampshire stepping into the Bitcoin landscape, it is evident that institutional and governmental interest in this cryptocurrency is on the rise, signaling a shift in how Bitcoin is perceived as a legitimate asset class.
