Texas has officially joined the growing number of states adding Bitcoin to their investment portfolios. This move diversifies the state’s finances and positions Texas as a leader in exploring cryptocurrency as a treasury asset.
How Texas Will Manage its Bitcoin
The new law, SB 21, creates a Bitcoin reserve that operates independently from the state treasury. The Comptroller of Public Accounts will manage the fund, with the power to invest in Bitcoin and other cryptocurrencies. However, there’s a catch: only cryptocurrencies with a market cap averaging over $500 billion over the past year are eligible. This currently means Bitcoin is the primary candidate, with Ethereum potentially qualifying in the future. Any use of the reserve’s funds requires approval from the state legislature. The Comptroller can, however, use Bitcoin or its proceeds to cover reserve management costs.
A separate bill, HB 4488, protects the Bitcoin reserve from routine treasury sweeps and ensures its legal existence even if no Bitcoin is purchased by 2026.
The Bitcoin Reserve Race Among States
Texas is the third state to establish a Bitcoin reserve, following Arizona and New Hampshire. This follows a federal initiative signed into law by President Trump encouraging states to consider Bitcoin as an investment. Several other states are also exploring similar initiatives, while others have faced setbacks.
Bitcoin’s Current Market Performance
At the time of writing, Bitcoin is trading at $102,650, down slightly over the past week. This reflects a broader recent price correction in the cryptocurrency market.