Texas Buys $5M in BTC ETF as States Edge Toward First Government Crypto Reserves

The effort is starting small, but Texas made an opening foray into a state-based crypto reserve — getting closer to the first government stockpile in the U.S.

• It’s not technically the start of a direct state-based bitcoin reserve, but Texas has picked up $5 million in a bitcoin ETF, which a spokesman said is a placeholder for the first direct state-funds investment.
• The state is working on its reserve, having put out an information request that expired last month, and it had already appropriated $10 million earlier this year for that purpose.
• Other states have previously put state pension funds into such ETFs on behalf of retirees, but advocates are still awaiting a state to start its own stockpile.

Texas took a step toward building a state-based crypto reserve, grabbing $5 million of BlackRock’s bitcoin exchange-traded fund, officials told CoinDesk, though the state is still setting up its Texas Strategic Bitcoin Reserve.

The state recently gathered information from the crypto industry on a proper approach to building its bitcoin stockpile, and it passed legislation earlier this year appropriating $10 million to fund it, leaving only a few last steps before it potentially becomes the first of the U.S. states to begin long-term crypto investments in earnest, though others would be expected to soon join it.

A few weeks ago, Texas moved past its deadline to “capture the industry’s best practices so it can utilize these practices in the implementation and management” of its bitcoin reserve, according to its formal request for information issued in September. Entities across the industry provided input on how it could set up and manage the stockpile conceived of in the Texas Strategic Bitcoin Reserve and Investment Act.

Last week, the state comptroller’s office moved to secure $5 million in BlackRock’s iShares Bitcoin Trust (IBIT) as a placeholder, a spokesman for the Texas Comptroller of Public Accounts told CoinDesk on Tuesday. It’s an opening move as the state continues to work toward a contract with a custodian, he said, which will take place after it develops its formal request for proposal.

That’s not a pure bitcoin stake, and it’s not the first state entity to put government money into a crypto ETF, with other states having previously invested in such funds with public-employee retirement money. (Michigan has been building such an investment, and Wisconsin sold its $350 million pension-fund stake in the BlackRock ETF in May.) ETF purchases remain just a step removed from direct crypto holdings.

New Hampshire and Arizona are also running their own efforts to stand up reserves, well ahead of the U.S. government that started the ball rolling with President Donald Trump’s rhetoric on making a long-term federal crypto investment, which started as a campaign promise and developed into an executive order. The Trump administration remains in the planning stage, and the officials assigned with pursuing the reserve are also waiting for Congress to provide some formal powers to back the effort.

Though New Hampshire was first in the nation to pass legislation, it’s still working on its reserve project.

“No moves have been made as of today,” said New Hampshire state Representative Keith Ammon, who has been a leading crypto advocate there, but the state has been pursuing other crypto avenues, including authorizing a $100 million bitcoin bond through the New Hampshire Business Finance Authority last week. It’s a private-sector project, but the effort is also meant to fund a crypto-backed economic development fund.

Arizona has also made initial moves toward reserving crypto, with legislation earlier this year that would devote state-collected unclaimed crypto properties to build a stockpile.

Dennis Porter, CEO of the Satoshi Action Fund, has been among those pursuing reserves across the U.S., even providing legislative frameworks state lawmakers can use. He said in an interview with CoinDesk that his group is trying to play the long game, taking incremental wins and not overreaching.

“We are one of those organizations that is happy to meet lawmakers where they’re at, and if they’re not ready for it, to work on what they are ready to work on,” he said.

The efforts to get states to establish crypto reserves will surge again early next year, when many of the legislatures get back to work.

“You’re going to see a bunch of these states pop up when they try to do these efforts again,” he said, though a few have already been mulling proposals, such as those in Michigan and Massachusetts.

Porter said he’s not yet worried that the sharp digital assets market decline will get in the way, because it hasn’t reached a “red alert” level.

“I just don’t think that this drawdown is big enough for lawmakers to even have paid attention to it,” he said.

Lee Bratcher, president of the Texas Blockchain Council, congratulated the state in a Tuesday post on social media site X for having “bought the dip” — getting its bitcoin at an $87,000 price point after it dropped from more than $120,000.