Texas Government Buys The Bitcoin Dip, Adds $5 Million Shares of BlackRock’s IBIT ETF

Texas has taken another step towards building its Strategic Bitcoin Reserve (SBR) after acquiring $5 million worth of shares in BlackRock’s iShares Bitcoin Trust exchange-traded fund, IBIT.

The Lone Star State’s government recently held discussions with crypto industry players on adopting a proper approach to build its bitcoin stockpile, passing legislation earlier this year to appropriate $10 million from the general revenue to fund the reserve. Texas could become the first U.S. state to begin long-term crypto asset investments in earnest, with others expected to join soon.

Texas Purchases Shares in BlackRock’s IBIT Spot Bitcoin ETF Worth $5 Million

The state comptroller’s office moved to secure the $5 million bitcoin purchase on November 20, which was announced via X on Tuesday by Lee Bratcher, president of the Texas Blockchain Council. He said that Texas has become the first state to buy the alpha cryptocurrency, which was acquired at a cost basis of approximately $87,000 per coin.

Bratcher highlighted that the state made its initial BTC allocation with BlackRock’s IBIT ETF, as the SBR is still under work, and the government will “eventually” self-custody its bitcoins. However, it is unclear whether this move is directly linked to Texas’s plan for a state-controlled bitcoin reserve.

In June, Governor Gregg Abbott signed the Texas Strategic Bitcoin Reserve and Investment Act, officially authorizing the creation of the Texas Strategic Bitcoin Reserve. This state-managed fund aims to hold BTC as part of its long-term financial assets and will be capitalized using public funds.

The Texas Senate Bill 21 (SB21) highlighted that only crypto assets with a market capitalization of more than $500 billion will be eligible for the reserve, a threshold currently met only by bitcoin. The SBR is to be administered by the Texas Comptroller of Public Accounts and guided by an advisory committee of three crypto investment professionals.

Abbott also signed House Bill 4488, which protects the SBR from being absorbed into the state’s general revenue fund. This legislation effectively insulates the bitcoin stockpile from Texas’s shifting budget priorities.

Commenting on the state’s purchase, Pierre Rochard, CEO of the Bitcoin Bond Company, said the move signals a significant shift in approach toward the world’s largest cryptocurrency in just a short period of time. He noted that in five years, governments went from banning bitcoin to accumulating small amounts of the digital gold.

“Hyperbitconization has happened, is happening, and will continue to happen,” he added.

While it is unclear whether the IBIT buys are directly tied to Texas’s plans for a strategic bitcoin reserve, but signal a step forward in the Lone Star state’s BTC adoption plans.

Texas Sen. Charles Schwertner Hints at Plans for Strategic Ethereum Reserve if ETH’s Market Cap Crosses Above $500B

According to a formal request for information issued in September, the government has moved past its deadline to understand the industry’s best practices and implement them in the management of its bitcoin stockpile. Several entities across the sector provided input on how Texas could handle the stockpile established by the Texas Strategic Bitcoin Reserve and Investment Act.

While Texas is going ahead with its bitcoin plans, other cryptocurrencies are also being considered. State Senator Charles Schwertner, one of the supporters of SB 21, has indicated that an ether (ETH) reserve could be next, if the second-largest crypto’s market capitalization can get above the $500 billion mark over the next 24 months. Currently, ETH has a market cap of $355.19 billion.

He told crypto media outlet Cointelegraph that if Ethereum can maintain its market cap above the threshold during that period, it is “reasonable and prudent” to give direction that it could be added to the cryptocurrency reserve.

Texas Joins U.S. States Wisconsin and Michigan In Holding Positions in Spot Bitcoin ETFs

The IBIT shares are not a pure bitcoin stake, and Texas is not the first state entity to put money into a U.S.-listed crypto spot ETF. 

In August, the Michigan Retirement System reported tripling its bitcoin ETF exposure, from 100,000 shares to 300,000 shares of the ARK 21Shares Bitcoin ETF (ARKB), valued at $11.4 million, in a 13-F form with the U.S. Securities and Exchange Commission (SEC). 

The state pension fund, overseeing $19.3 billion in assets under management, also holds 460,000 shares of the Grayscale Ethereum Trust (ETHE), valued at approximately $13.6, which has remained unchanged since September 2024.

In 2024, the State of Wisconsin Investment Board (SWIB) became the first U.S. state pension fund to invest in a spot bitcoin ETF, when it purchased nearly 2.9 million shares in BlackRock’s IBIT. This position was increased to over 6 million shares by the end of the year. However, this stake was liquidated in May for $350 million, as per the SWIB’s 13F filing. 

The board also has indirect exposure to bitcoin through Michael Saylor’s bitcoin treasury firm, Strategy, having purchased 26,571 MSTR shares for $10.5 million in Q1 2025. SWIB manages over $160 billion in AUM, serving the state’s employees through the Wisconsin Retirement System and other general-purpose public funds.

New Hampshire and Arizona have also established SBRs, with the former authorizing a $100 million bitcoin bond through the New Hampshire Business Finance Authority last week – a private sector project meant to fund a crypto-backed economic development fund, while the latter passed legislation earlier this year that devotes unclaimed crypto assets seized by the state to build its BTC stockpile. Representative Keith Ammon of New Hampshire noted that the state is still working on its bitcoin reserve project.

BlackRock’s IBIT Bitcoin ETF is Held by State Governments, Universities, and Soverign Wealth Funds

Meanwhile, Bloomberg senior ETF analyst Eric Balchunas highlighted in an X post that Texas now joins Harvard and the Abu Dhabi sovereign wealth fund in buying IBIT. He noted that BlackRock’s spot bitcoin ETF is the only one to be owned by all three, calling it “wild stuff” for a fund that is not even two years old.

According to a September 30 filing with the SEC, Harvard University owns 6.81 million IBIT shares, valued at approximately $442.8 million at the time of reporting. Al Warda Investments, a sovereign wealth fund managed by the Abu Dhabi Investment Council, holds 7.96 million shares of the ETF, valued at $517.6 million.

IBIT is down around 10% year-to-date, with its decline aligned with the dip in price of its underlying asset. The ETF, which is listed on the Nasdaq, closed Tuesday’s trading day at $49.56 – up 0.16%.

At the time of writing, Bitcoin (BTC) is trading at $87,527 – down 0.58% in 24 hours.