The cryptocurrency with the second-largest market cap was on its way to meeting requirements under Texas’ crypto reserve law until a price drop occurred on Friday.

This year, Texas’ legislature passed a law to establish a strategic Bitcoin reserve in the state, paving the way for additional cryptocurrencies in the future. According to the original sponsor of the bill, Ether could be the next asset added to the reserve.

On Thursday, Texas state Senator Charles Schwertner discussed the implementation of the Bitcoin reserve bill recently signed into law by Governor Greg Abbott in June. Although the bill allows Texas to hold other cryptocurrencies in a special fund outside the state treasury, Bitcoin was the only one to initially meet the requirements at that time.

“I’m really interested to see the speed at which they establish the reserve and how it acts from a returns standpoint,” said Schwertner. “If Ethereum maintains its market cap over 24 months, I think it’s reasonable and prudent to give direction that Ethereum could be added to the cryptocurrency reserve.”
“I’m indeed looking forward to how promptly the reserve is set up and its performance from an investment viewpoint,” Schwertner stated.

Under the law establishing a Texas Strategic Bitcoin Reserve, for a cryptocurrency to qualify as a reserve asset, it must have an average market capitalization of at least $500 billion over the recent 24-month period. Bitcoin, with a market cap exceeding $2 trillion, exceeds this threshold.

In contrast, Ether has only maintained a market cap of more than $500 billion on two occasions: briefly in 2021 and intermittently from August to October of this year. Recently, Ether’s value and market cap dropped sharply, reaching approximately $494 billion by the time of this article’s publication.

Related: Massachusetts Bitcoin reserve bill receives lukewarm response at hearing

While multiple US states have declined or failed to advance similar legislation, Arizona and New Hampshire both enacted laws in 2025. Arizona’s fund includes crypto seized from criminal forfeiture, whereas New Hampshire’s law allows for state treasury investments in cryptocurrencies with a market cap exceeding $500 billion.

“We’re the only state that actually put sovereign money, taxpayer money, toward the reserve,” Schwertner remarked. “We took the full punch of establishing a reserve along with the necessary funding.”
“We’re unique as a state for allocating taxpayer resources directly to this reserve,” Schwertner commented.

The state comptroller is currently exploring how to take action on this new law, including identifying custodians for the reserve’s assets. Any custodian must be a state or federally chartered financial institution or another entity regulated under Texas law.

Texas’ law follows similar initiatives taken by the federal government, where President Donald Trump established both a Strategic Bitcoin Reserve and a Digital Asset Stockpile earlier this year. The executive order outlined policies for using confiscated cryptocurrency to fund the reserve, though officials later indicated there were other budget-neutral methods for acquiring Bitcoin.