Bitcoin News Today: "Texas Vaults Bitcoin as Digital Gold, Bets on Inflation Hedge"

Texas Becomes First U.S. State to Add Bitcoin to Its Treasury

Texas has made history as the first U.S. state to allocate Bitcoin to its treasury, purchasing $10 million in the cryptocurrency through BlackRock's iShares Bitcoin Trust (IBIT) ETF. The acquisition, announced on November 20, marks a significant step in the state's strategic diversification of reserves and reflects growing institutional interest in Bitcoin as a hedge against inflation and a store of value. The purchase, averaging approximately $87,000 per Bitcoin, was executed as the state finalizes plans for self-custody of its digital assets.

The move is part of a broader legislative initiative spearheaded by the Texas Blockchain Council, which advocated for the creation of a Strategic Bitcoin Reserve. Governor Greg Abbott signed the legislation into law earlier this year, authorizing the state to buy and hold Bitcoin as a long-term asset. Lee Bratcher, President of the Texas Blockchain Council, emphasized that the initial allocation was made via BlackRock's ETF while the state works to establish self-custody infrastructure.

Texas's decision aligns with a global trend of institutional adoption. Harvard University's endowment recently tripled its IBIT holdings to $442.8 million, while Emory University and Abu Dhabi's Al Warda Investments have also increased Bitcoin exposure. The state's purchase follows New Hampshire's approval of a $100 million Bitcoin-backed municipal bond earlier this month, signaling a shift in how governments approach digital assets.

Critics, however, highlight Bitcoin's volatility as a risk to public funds. The cryptocurrency has traded near $87,500, roughly 30% below its all-time high, raising concerns about short-term price swings. Proponents, including Bratcher, argue that Bitcoin's inflation-hedging properties and decentralized nature make it a valuable addition to traditional reserves. The state's strategic reserve aims to hold the asset for at least five years, with transparency ensured through annual audits and public reporting.

The decision also sparks debate about regulatory frameworks. Japan's Financial Services Agency, for example, is set to mandate crypto exchanges hold liability reserves to cover losses from hacks or operational failures, a move that could influence how states like Texas manage their digital holdings. As Texas navigates self-custody and regulatory compliance, its approach may serve as a blueprint for other states considering Bitcoin as a reserve asset.