Ethereum News Today: Texas Crypto Reserve Balances Innovation and Volatility Risks

Texas Governor Greg Abbott signed Senate Bill 21 (SB 21) into law on June 21, 2025, establishing the Texas Strategic Bitcoin ReserveTexas Strategic Bitcoin Reserve^[1]. This move positions Texas as the third U.S. state-following New Hampshire and Arizona-to create a state-level cryptocurrency reserveU.S. States Lead the Charge: New Hampshire, Texas, and Arizona…^[2]. The reserve, managed by the Texas Comptroller of Public Accounts, is designed to hedge against inflation, enhance financial resilience, and position Texas as a leader in digital asset innovationTexas Governor Signs Bitcoin Reserve Bill SB 21 Into Law^[3].

The law permits the reserve to hold cryptocurrencies with an average market capitalization of at least $500 billion over the preceding 24 monthsEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4]. Currently, Bitcoin meets this threshold, with a market cap exceeding $2 trillion. However, the bill leaves room for future inclusion of other assets, such as Ether (ETH), provided they sustain the required market cap for the full 24-month periodEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4]. As of September 2025, Ethereum's market cap has averaged $527 billion, exceeding the thresholdTexas officially launches Bitcoin Reserve fund^[8]. A recent dip in ETH's value briefly brought its market cap below $500 billion, but sustained performance over the 24-month window could qualify it for inclusionEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4].

Under SB 21, the Texas Comptroller will oversee custodial arrangements, selecting regulated institutions to manage the reserveEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4]. The law mandates biennial public reporting on the fund's performance and requires legislative approval for disbursements. The reserve may also engage in staking and derivatives, provided ownership remains with the state.

The inclusion of Ether would mark a significant expansion of Texas' crypto strategy. State Senator Charles Schwertner, the bill's original sponsor, has indicated that Ethereum is a potential candidate if it maintains compliance with the 24-month market-cap requirementEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4]. This approach reflects a cautious, rules-based framework aimed at mitigating volatility risks while aligning with broader economic goalsEther Could Be Added to Texas Strategic Bitcoin Reserve If Market…^[4].

Texas' reserve differs from similar initiatives in other states. While Arizona's reserve is funded by seized crypto assets and New Hampshire's by unclaimed property, Texas' fund is directly financed through state appropriationsEthereum Market Cap (Daily) - Historical Data & Trends…^[6]. The law also includes protections, such as HB 4488, to prevent reserve funds from being redirected to general state revenue.

The move has drawn both support and criticism. Proponents argue that Bitcoin and Ether offer diversification benefits in an era of rising inflation and geopolitical uncertaintyTexas Strategic Bitcoin Reserve^[1]. Critics, however, highlight the risks of market volatility and the lack of long-term safeguards for taxpayer funds.

With Ethereum's current market dynamics, the state's crypto advisory board may begin evaluating its eligibility for inclusion in the near term. The Comptroller's office has emphasized adherence to prudent investment standards, stating that any addition would require rigorous oversightTexas Strategic Bitcoin Reserve^[1].