Bitcoin News Today: Texas Uses ETF as Bridge to Self-Custodied Bitcoin Reserve

Texas has executed the first state-backed Bitcoin allocation in U.S. history, investing $5 million in BlackRock's iShares Bitcoin Trust (IBIT) as part of its newly established Strategic Bitcoin Reserve. The move, disclosed by Lee Bratcher, marks a temporary step while the state finalizes infrastructure to hold Bitcoin directly in government-controlled wallets. The $10 million reserve, authorized under legislation passed earlier this year, aims to diversify Texas' financial assets and hedge against inflation, with the remaining $5 million expected to transition to self-custodied Bitcoin once a custodian is selected through a public process according to reports.

The ETF purchase aligns with broader institutional adoption of Bitcoin, as BlackRock's IBIT has attracted high-profile buyers such as Harvard University and Abu Dhabi's Al Warda Investments, which together hold billions in the fund according to analysis. Texas' decision to use an ETF as an interim measure reflects practical considerations: the state's legal framework requires reserve assets to maintain a market capitalization above $500 billion, a threshold Bitcoin easily exceeds but the ETF itself does not meet according to financial data. This distinction underscores the temporary nature of the allocation, with officials emphasizing that direct ownership remains the long-term goal.

The move has drawn attention for its implications on state-level crypto policy. Pierre Rochard, CEO of The Bitcoin Bond Company, highlighted the rapid shift in government attitudes, noting that "in five years we went from 'governments will ban bitcoin' to 'governments are only buying a small amount of bitcoin'". Texas joins a growing list of states exploring or implementing crypto reserves, including Wisconsin, which invested $100 million in IBIT in 2024, and New Hampshire and Arizona, which are in early stages of their own programs according to financial reports.

Governor Greg Abbott's June 2025 approval of the Strategic Bitcoin Reserve law provided the legal foundation for the investment. The law mandates a structured approach, including public solicitation of custodial best practices and a formal request for proposals to secure a custodian as reported. As of November 20, Texas had completed its initial ETF allocation but remains in the process of finalizing custody arrangements, with Bratcher stating the state will "self-custody Bitcoin" once systems are ready.

Market reactions to the purchase have been mixed. While Bitcoin's price dipped to $87,000 at the time of the investment, analysts like CryptoQuant's team noted potential bullish signals from accumulation by large holders. However, the fund's performance down 10% year-to-date raises questions about the timing of the allocation. The state's strategy also intersects with broader federal and state-level efforts, including President Donald Trump's executive order on a federal crypto reserve, though Congressional authorization remains pending according to analysis.

Texas' initiative signals a pivotal moment in the normalization of Bitcoin as a strategic asset. By leveraging ETFs as a bridge to direct ownership, the state is navigating regulatory and logistical challenges while setting a precedent for other jurisdictions. As more states advance similar programs, the landscape for institutional crypto adoption continues to evolve, with Texas at the forefront of this financial innovation.