{"id":80224,"date":"2025-12-08T12:12:10","date_gmt":"2025-12-08T12:12:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/80224\/"},"modified":"2025-12-08T12:12:10","modified_gmt":"2025-12-08T12:12:10","slug":"texas-starts-cryptocurrency-reserve-with-5-million-buy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/80224\/","title":{"rendered":"Texas starts cryptocurrency reserve with $5 million buy"},"content":{"rendered":"

Audio recording is automated for accessibility. Humans wrote and edited the story. See our AI policy<\/a>, and give us feedback<\/a>.<\/p>\n

Texas has launched its new cryptocurrency reserve with a $5 million purchase of Bitcoin as the state continues to embrace the volatile and controversial digital currency. <\/p>\n

The Texas Comptroller\u2019s Office confirmed the purchase was made last month as a \u201cplaceholder investment\u201d while the office works to contract with a cryptocurrency bank to manage its portfolio. <\/p>\n

The purchase is one of the first of its kind by a state government, made during a year where the price of Bitcoin has exploded amid the embrace of the digital currency by President Donald Trump\u2019s administration and the rapid expansion of crypto mines in Texas. <\/p>\n

\u201cThe Texas Legislature passed a bold mandate to create the nation\u2019s first Strategic Bitcoin Reserve,\u201d acting Comptroller Kelly Hancock wrote in a statement. \u201cOur goal for implementation is simple: build a secure reserve that strengthens the state\u2019s balance sheet. Texas is leading the way once again, and we\u2019re proud to do it.\u201d<\/p>\n

The purchase represents half of the $10 million the Legislature appropriated for the strategic reserve during this year\u2019s legislative session, but just a sliver of the state\u2019s $338 billion budget. <\/p>\n

However, the purchase is still significant, making Texas the first state to fund a strategic cryptocurrency reserve. Arizona and New Hampshire have also passed laws to create similar strategic funds but have not yet purchased cryptocurrency. <\/p>\n

Wisconsin and Michigan made pension fund investments in cryptocurrency last year. <\/p>\n

The Comptroller\u2019s office purchased the Bitcoin the morning of Nov. 20 when the price of a single bitcoin was $91,336, according to the Comptroller\u2019s office. As of Friday afternoon, Bitcoin was worth slightly less than the price Texas paid, trading for $89,406. <\/p>\n

University of Houston energy economist Ed Hirs questioned the state\u2019s investment, pointing to Bitcoin\u2019s volatility. That makes it a bad investment of taxpayer dollars when compared to more common investments in the stock and bond markets, he said. <\/p>\n

\u201cThe ordinary mix (in investing) is one that goes away from volatility,\u201d Hirs said. \u201cThe goal is to not lose to the market. Once the public decides this really has no intrinsic value, then it will be over, and taxpayers will be left holding the bag.\u201d <\/p>\n

The price of Bitcoin is down significantly from an all-time high of $126,080 in early October. <\/p>\n

Lee Bratcher, president of the Texas Blockchain Council, argued the state is making a good investment because the price of Bitcoin has trended upward ever since it first launched in early 2009. <\/p>\n

\u201cIt\u2019s only a 16-year-old asset, so the volatility, both in the up and down direction, will smooth out over time,\u201d Bratcher said. \u201cWe still want it to retain some of those volatility characteristics because that\u2019s how we could see those upward moves that will benefit the state\u2019s finances in the future.\u201d<\/p>\n

Bratcher said the timing of the state\u2019s investment was shrewd because he believes it is unlikely to be valued this low again. <\/p>\n

The investment comes at a time that the crypto industry has found a home in Texas. <\/p>\n

Rural counties have become magnets for crypto mines ever since China banned crypto mining in 2021 and Gov. Greg Abbott<\/a> declared \u201cTexas is open for crypto business\u201d in a post on social media.<\/p>\n

The state is home to at least 27 Bitcoin facilities<\/a>, according to the Texas Blockchain Council, making it the world\u2019s top crypto mining <\/a>spot. The two largest crypto mining facilities in the world call Texas home. <\/p>\n

The industry has also come under criticism as it expands. <\/p>\n

Critics point to the industry\u2019s significant energy usage, with crypto mines in the state consuming 2,717 megawatts of power in 2023, according to the comptroller\u2019s office<\/a>. That is enough electricity to power roughly 680,000 homes. <\/p>\n

Crypto mines use large amounts of electricity to run computers that run constantly to produce cryptocurrencies, which are decentralized digital currencies used as alternatives to government-backed traditional currencies.<\/p>\n

A 2023 study<\/a> by energy research and consulting firm Wood Mackenzie commissioned by The New York Times found that Texans\u2019 electric bills had risen nearly 5%, or $1.8 billion per year, due to the increase in demand on the state power grid created by crypto mines.<\/p>\n

Residents living near crypto mines have also complained that the amount of job creation promised by the facilities has not materialized and the noise of their operation is a nuisance<\/a>. <\/p>\n

\u201cTexas should be reinvesting Texan\u2019s tax money in things that truly bolster the economy long term, living wage, access to quality healthcare, world class public schools,\u201d said state Sen. Molly Cook<\/a>, D-Houston, who voted against the creation of the strategic fund. \u201cInstead it feels like they\u2019re almost gambling our money on something that is known to be really volatile and has not shown to be a tide that raises all boats.\u201d<\/p>\n

State Sen. Charles Schwertner<\/a>, R-Georgetown, who authored the bill that created the fund, said at the time it passed that it will allow Texas to \u201clead and compete in the digital economy.\u201d<\/p>\n

Disclosure: New York Times, Texas Blockchain Council and University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune\u2019s journalism. Find a complete\u00a0list of them here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Audio recording is automated for accessibility. Humans wrote and edited the story. See our AI policy, and give…\n","protected":false},"author":2,"featured_media":80225,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[27,2794,29,293,28],"class_list":{"0":"post-80224","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-texas","8":"tag-texas","9":"tag-texas-comptroller-of-public-accounts","10":"tag-texas-headlines","11":"tag-texas-legislature","12":"tag-texas-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/80224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=80224"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/80224\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/80225"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=80224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=80224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=80224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}