Texas Advances State Bitcoin Adoption with ETF Purchase and Self-Custody Strategy

Key Takeaways:

• Texas is pioneering a hybrid state treasury model using both a Bitcoin ETF and planned self-custody.
• Governor Abbott’s $500 billion market cap rule provides a clear policy framework for adoption.
• ETF accessibility lowers operational barriers, likely encouraging other states to follow.

​​Texas has significantly expanded its position in digital assets through a $10 million allocation, split equally between an investment in BlackRock’s spot Bitcoin ETF (IBIT) and planned direct purchases for self-custody. 

How Texas Just Pressured Other States to Hold Bitcoin

The state government initiated this strategy with a $5 million purchase of BlackRock’s IBIT ETF. A further $5 million has been reserved for the acquisition of Bitcoin that will be placed into direct state custody once the requisite security and operational protocols are finalized. 

According to Lee Bratcher, president of the Texas Blockchain Council, the transaction highlights the state's intention to transition to self-custody.

TEXAS BOUGHT THE DIP!
Texas becomes the FIRST state to purchase Bitcoin with a $10M investment on Nov. 20th at an approximately $87k basis!
Congratulations to Comptroller @KHancock4TX and the dedicated investments team at Texas Treasury who have been watching this market… pic.twitter.com/wsMqI9HrPD

— Lee ₿ratcher (@lee_bratcher) November 25, 2025

For now, BlackRock ETF provides regulated, liquid exposure without the immediate security requirements of managing private keys. This phased approach allows the state to gain immediate market exposure while building the necessary infrastructure for direct ownership.

In June, Governor Greg Abbott authorized the creation of a state-managed Bitcoin reserve, allowing public funds to hold digital assets with a market capitalization above $500 billion.

Texas Moves to Establish Strategic Bitcoin Reserve: A New Era in State Finance.

via @techstoryin https://t.co/e5utsSzDfI

— Greg Abbott (@GregAbbott_TX) May 23, 2025

Texas’s entry comes at a time when Bitcoin ETF inflows continue to rise, signaling an expansion in institutional and government demand despite market volatility.

Why Institutions Stay Bullish Despite Bitcoin's Sharp Decline

This expansion of Texas's BTC holdings occurs against a backdrop of significant market volatility. Bitcoin has declined more than 26% from its October peak, erasing its gains for 2025. 

This downturn is attributed not to singular external events, but to a combination of tighter liquidity, the unwinding of leverage, and the asset’s recurring cyclical behavior.

Nonetheless, institutions appear unfazed. 

According to Coinbase’s new “Navigating Uncertainty” report, two-thirds of surveyed institutions remain positive on Bitcoin, trading around $111,000 at press time.

They also show more confidence in the market’s late-cycle strength than retail investors, signaling a significant sentiment gap. 

Many institutional players continue treating price dips as strategic accumulation windows: BitMine chair Tom Lee continues his ETH purchases, while Michael Saylor has signaled further expansion of Strategy’s Bitcoin holdings.

Coinbase attributes sustained institutional optimism to expectations of a Federal Reserve rate cut, fiscal stimulus from China, and improving global liquidity. These macroeconomic factors could shift capital from money-market funds into higher-return assets like Bitcoin.