"Texas Senate Unanimously Advances Bitcoin Reserve Bill Amid Market Volatility"

The Texas Senate Banking Committee has taken a significant step towards financial innovation by unanimously advancing Senate Bill 21 (SB-21), which proposes the creation of a Texas Strategic Bitcoin Reserve. The bill, passed with a 9–0 vote on February 27, 2025, empowers the Texas Comptroller to manage investments in bitcoin and other digital assets, aiming to enhance the state's financial resilience.

SB-21 outlines a comprehensive framework for the establishment and administration of the Texas Strategic Bitcoin Reserve. The reserve will be constituted as a special fund outside the state treasury, granting it greater autonomy and flexibility in investment strategies. The fund's composition includes legislative appropriations, dedicated revenues, purchased cryptocurrencies, investment earnings, and donations. Notably, any cryptocurrency acquired must have an average market capitalization of at least $500 billion over the preceding 12 months, ensuring the reserve's focus on established digital assets.

If passed, the bill would authorize the Texas Comptroller to engage in a range of investment activities, including acquiring, selling, and managing assets within the reserve. To ensure prudent management, the bill permits contracting with third-party entities for administration and mandates independent audits by certified public accountants. Additionally, an advisory committee comprising the comptroller and experts in cryptocurrency investments will provide guidance on asset valuation and investment policies.

The advancement of SB-21 occurs during a period of notable volatility in the bitcoin market. Recently, the price of bitcoin has exhibited a significant downturn, entering a technical bear market with a decline of over 20% from its January peak of $109,350 to approximately $85,821. This downward trend is attributed to a confluence of factors, including substantial outflows from spot bitcoin ETFs, macroeconomic uncertainties, and a major $1.5 billion hack of the ByBit exchange, reportedly orchestrated by North Korean actors.

Despite the recent price action, proponents of SB-21 argue that establishing a bitcoin reserve could serve as a strategic hedge against inflation and economic volatility. State Senator Charles Schwertner, who introduced the bill, emphasizes that bitcoin possesses strategic potential for enhancing Texas' financial resilience. The bill asserts that the creation of such a reserve serves the public purpose of providing enhanced financial security to the state's residents.

The proposal has ignited a spectrum of opinions. Supporters