Texas will be the second state to approve a Bitcoin strategic reserve using public funds. It does so as the price of the crypto reaches a new all-time high. We discuss this in the article below.
The state of Texas is set to launch a Bitcoin reserve, making it the second state to do so. This followed a vote passed by the House of Representatives on Senate Bill 21 with a 101-42 margin. Introduced by Republican Senator Charles Schwertner of Georgetown, it will authorise the state controller to buy and manage cryptocurrency assets. They must have a market value of over $500 billion, which is currently solely Bitcoin.
The Texas Bitcoin Bill
The bill was approved back in March. This will make them the second state to implement this scheme after New Hampshire. Crucially, like New Hampshire, this money will come from state budget allocations and donations given by companies and private citizens.
Bitcoin has recently hit a high, reaching $111,000 for the first time in its history. Its previous zenith was $109,000 which it achieved in January. This has been the culmination of several global events, such as lowering interest rates in Europe and Asia, coupled with the reduction of tariffs in the United States. Further regulatory approval such as the one in Texas has also helped. According to the Bitcoin price OKX have provided, it currently sits at $110855. This could see it stabilize around this region for some time.
The bill will now go to Governor Greg Abbott who must decide if he will sign it into law. This is quite likely, as he has long been an advocate for the use of cryptocurrency. It will require the state reserve to go under regular third-party audits. These reports must be given to the state legislature every two years.
Texas has long had a strong affiliation with cryptocurrency and Bitcoin, even having its own Texas Blockchain Council. Board member Brian Morgenstern, who is also a director at Riot Platforms, explained “Bitcoin is now one of the most valuable assets in the world.” He then added that “Short-term volatility is significantly outweighed by the longer-term track record of this asset.”
The state is a financial heavyweight, and taking this step is a clear signal to the rest of the US and the globe. It has a GDP of $2.7 trillion and ranks as the second-largest economy in the United States. Many have also dubbed it the home of crypto mining, due to its affiliations with cryptocurrency. Its portion of Bitcoin mining is almost three times that of any other state.
New Hampshire’s Strategic Reserve
Texas will not be the first state to open a Bitcoin reserve. They were pipped at the post by New Hampshire, who signed a bill during the second week in May. Its treasury will now be allowed to allocate up to 5% of public funds to digital assets and precious metals. However, they must have a market cap of $500 billion. This makes Bitcoin the only one able to fulfil this so far.
As the state can use public funds, it differs from the reserve signed in by the US Government. This will only allow seized assets to be placed in a reserve. Thus, New Hampshire is blazing a trail for cryptocurrencies.
Arizona was poised to allow a similar system though it has been more cautious as its Governor Katie Hobbs refused to sign it. This was despite a 31–25 vote in its favour. Her statement read that “The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currencу.” It has passed an amended version though, that will allow unclaimed assets to be seized by the state.
New Bitcoin Mining Project to Start in Texas
Even with the current pressure facing Bitcoin miners, Texas is still forging ahead with further facilities. Sangha Renewables has just announced a new 19.9MW Bitcoin mining site in Texas. Crucially, it will use solar energy. to power its productions and not take energy from the grid.
It will be situated on a 5.5-acre plot of land, where a working solar farm has been located for some time. So far the company has raised over $14 million in equity and hopes to be up and running by fall 2025. All investors will be paid directly in cryptocurrency via smart contracts. They are also pioneering a concept that pairs Bitcoin mining with independent power producers. By doing so, they hope to be able to produce cryptocurrency at a reduced rate.
With more institutional adoption, it is inevitable that this price will rise. It may not be in the short term, but with a long-term view in mind, Bitcoin could go even further. Some analysts even have it pegged as high as $250,000 by the end of the year. For investors, now is the time to keep watching the markets and decide if now is the time for profit-taking or holding your nerve.
