Texas has become the first U.S. state to start buying Bitcoin (BTC) and add it to a strategic cryptocurrency reserve.
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Texas Governor Greg Abbott has signed into law “Senate Bill 21” that directs the state to establish a Bitcoin reserve managed independently from its main treasury, effectively creating a publicly funded crypto reserve.
The Texas government has begun funding the Bitcoin reserve, appropriating $10 million to immediately purchase the largest cryptocurrency by market capitalization. While New Hampshire was the first U.S. state to pass legislation to create a strategic Bitcoin reserve, Texas is the first to set aside money and actually start purchasing BTC.
Several other states are debating whether to acquire cryptocurrencies with taxpayer money.
Long-Term Holding?
The foray into BTC among American states comes months after the Trump administration announced the creation of a national cryptocurrency reserve at the federal level. However, the federal crypto reserve is being funded in budget-neutral ways such as through crypto asset seizures or by issuing crypto bonds.
In Texas, the legislation marks a shift in how states may begin treating cryptocurrencies and other digital assets. Texas lawmakers say they see Bitcoin not as a speculative investment but as a sovereign financial instrument worth holding long-term. The price of BTC has gained 7% this year.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on cryptocurrencies such as Bitcoin, so we’ll look instead at its three-month performance. As one can see in the chart below, the price of BTC has risen 14.74% in the last 12 weeks.
