Texas Buys $5M of Spot Bitcoin ETF IBIT in First State-Level BTC Move

First U.S. State to Gain Bitcoin Exposure via ETF

Texas has become the first U.S. state to publicly gain exposure to Bitcoin, purchasing $5 million worth of BlackRock’s iShares Bitcoin Trust (IBIT), a spot Bitcoin exchange-traded fund. The move is part of a broader plan to build a Texas Strategic Bitcoin Reserve, a first-of-its-kind state-level crypto reserve designed to hold Bitcoin as a long-term asset.

The transaction was executed on November 20, 2025, and later confirmed by Lee Bratcher, President of the Texas Blockchain Council. According to Bratcher, the purchase is an initial allocation from a total of $10 million that the state legislature has earmarked for Bitcoin exposure.

For now, the position sits in ETF form, providing the state with regulated market exposure while it finalises the operational, legal and custody framework required to hold Bitcoin directly on its own balance sheet.

Inside the Deal: $10M Allocation, $5M Deployed, Self-Custody to Follow

Under the reserve framework approved earlier this year, Texas has allocated $10 million from general revenue for investment into Bitcoin. Of this, $5 million has been deployed into IBIT; the remaining $5 million is reserved for a future purchase of spot BTC that the state intends to self-custody once the necessary infrastructure is ready.

Bratcher clarified in a public statement that the ETF exposure is a temporary stepping stone. The long-term objective is to move away from ETF-only exposure and hold Bitcoin directly within the state’s Strategic Bitcoin Reserve. That will require approved custodial arrangements, technical storage systems, and clearly defined governance around key management and access controls.

Reports indicate that Texas entered the trade at an average price of around $87,000 per BTC, amid high volatility in the broader crypto market. The state’s thesis appears to be less about short-term gains and more about inflation hedging and strategic diversification of treasury assets.

Texas Strategic Bitcoin Reserve: Law, Limits and Design

The purchase is rooted in legislation establishing the Texas Strategic Bitcoin Reserve, which authorises the state to hold qualifying digital assets as a form of strategic reserve — similar in spirit to how governments hold gold or foreign currency.

Key features of the framework include:

• The reserve is limited to cryptocurrencies whose average market capitalisation over the prior 24 months exceeds $500 billion, a threshold currently met by Bitcoin.
• Funds must be used exclusively for acquiring eligible assets; they cannot be repurposed for general expenditure without legislative change.
• The structure is designed to create a long-term, rules-based Bitcoin allocation, rather than opportunistic trading.

The law was passed by strong majorities in both chambers of the Texas Legislature and signed by Governor Greg Abbott, underscoring the state’s ambition to brand itself as a leading crypto and blockchain hub in the U.S.

Why an ETF First? Regulatory Comfort and Operational Ramp-Up

Observers have asked why Texas chose to begin with a spot Bitcoin ETF instead of directly purchasing BTC on-chain. The answer lies in a mix of regulatory comfort and operational readiness.

By using BlackRock’s IBIT:

• The state gains Bitcoin-linked exposure through a regulated, exchange-traded security, benefiting from existing custodial, audit and reporting structures.
• Compliance and accounting are simpler in the short term, as the ETF behaves like other financial assets already familiar to government treasuries.
• Texas can start its reserve program immediately, without waiting for custom wallets, multi-signature setups and cyber-security frameworks to be built and tested.

Once those systems are in place, officials have suggested that ETF holdings could be rebalanced into directly held Bitcoin, leaving IBIT as either a smaller allocation or a tactical tool rather than the core reserve asset.

Growing Institutional and Government Appetite for Bitcoin

Texas’ move comes amid a broader wave of institutional adoption of spot Bitcoin ETFs. University endowments, sovereign funds and state-level entities elsewhere in the U.S. have also disclosed IBIT positions and similar exposure to other approved spot Bitcoin funds.

Earlier this year, the state of Wisconsin revealed a sizeable position in IBIT, and recent regulatory filings show that large institutions — from university endowments to global asset managers — are increasingly viewing spot Bitcoin ETFs as an acceptable gateway to the asset class.

For Texas, the step is more than symbolic. By embedding Bitcoin in a formal reserve structure, the state is signalling that it sees BTC less as a speculative play and more as a macro-level, strategic asset with a role in long-term public finance.

Risks and Open Questions: Volatility, Policy and Precedent

While the purchase has been welcomed by Bitcoin advocates, it also raises important questions:

• Price volatility: Bitcoin remains highly volatile. Sharp drawdowns could create political controversy if paper losses mount on publicly disclosed positions.
• Policy continuity: Future administrations may have different views on Bitcoin exposure, raising questions about the stability of long-term reserve policy.
• Accounting & risk frameworks: Governments are still developing best practices on how to mark, report and hedge crypto assets in public balance sheets.

Nevertheless, Texas’ step may encourage other states or municipalities to explore similar structures, especially if the program is perceived as successful over time.

Shunyatax Global Insight: Public Treasuries, Crypto and Governance

At Shunyatax Global, we see Texas’ Bitcoin ETF purchase as a milestone in the convergence of public finance and digital assets. As more public entities experiment with Bitcoin and other blockchain-based exposures, the importance of sound governance increases dramatically.

For governments, public-sector units and large institutions, key design questions include:

• How to define allocation limits and risk appetite for volatile assets like Bitcoin.
• Which custody models — ETF, qualified custodian or self-custody — fit their legal and operational realities.
• How to integrate crypto reserves into existing treasury, audit and reporting frameworks.
• What contingency plans are needed for cyber-security, key loss or extreme market stress.

To explore how Shunyatax Global can help you design responsible digital-asset strategies, evaluate ETF vs. self-custody options, and build robust governance for crypto exposure, visit Shunyatax Global Services.