The Texas state government has taken a significant step in Bitcoin investment by purchasing $5 million in shares from BlackRock’s spot Bitcoin exchange-traded fund (ETF). An additional $5 million is earmarked for direct self-custodied Bitcoin purchases, marking an increase in state-level engagement with cryptocurrency in the U.S.

The acquisition occurred on November 20, with Texas Blockchain Council president Lee Bratcher announcing the purchase via X on Tuesday. He stated that the Texas government will eventually transition to self-custody of Bitcoin, but the initial $5 million allocation is tied to BlackRock’s IBIT ETF. Bratcher noted, “$10M is allocated from general revenue, but not all $10M has been allocated.”

Texas Bitcoin Investment Source: Lee Bratcher

Pierre Rochard, CEO of The Bitcoin Bond Company, remarked that Texas’s investment reflects a notable evolution in government attitudes toward Bitcoin:
“In five years we went from ‘governments will ban bitcoin’ to ‘governments are only buying a small amount of bitcoin.’ Hyperbitcoinization has happened, is happening, and will continue to happen.”

The implications of this investment may intersect with the state’s plans for a strategic Bitcoin (BTC) reserve. In June, Governor Gregg Abbot authorized the establishment of a state-managed fund for BTC, utilizing public funds for treasury development. According to the initial legislation, only assets with a market cap exceeding $500 billion qualify for the reserve, a benchmark Bitcoin meets but BlackRock’s IBIT does not.

This investment is seen as a move towards cementing Texas’s commitment to Bitcoin. Furthermore, the state may be looking to extend its digital currency investments, as Senator Charles Schwertner indicated interest in including Ethereum (ETH), contingent on its market cap maintaining over $500 billion.

In contrast, Wisconsin has previously acquired nearly $100 million worth of BlackRock’s Bitcoin ETF. Additionally, Eric Balachunas, a senior ETF analyst at Bloomberg, noted that Texas joins esteemed institutions like Harvard and Abu Dhabi in recent purchases of IBIT, generating interest in the fund’s growing legitimacy.

As of now, IBIT has decreased by approximately 10% year-to-date, despite rising acceptance of Bitcoin under the current administration. At the time of this report, IBIT’s trading value is $49.56, displaying a modest 0.22% increase in after-hours transactions.