$500 million investment in BTC reserves, Texas leading the construction of an encryption utopia?

Original | Odaily Planet Daily (@OdailyChina)

Author | Ethan (@Jingchun333)

The crypto storm continues to rage over the United States.

On March 7, President Trump signed an executive order entitled ‘Establishing the Strategic Bitcoin Reserve and US Digital Asset Reserve’; On March 8, the White House Cryptocurrency Summit was held, bringing together government officials and cryptocurrency industry leaders; On March 9, a new move in Texas once again ignited the passion of the entire cryptocurrency market - the State Senate officially passed Senate Bill 21 (SB 21), creating the first state-level cryptocurrency fund in US history - Texas Bitcoin Reserve!

This land of the ‘Wild West’ is now to become the ‘State of Digital Gold,’ and will invest 500 million US dollars each year to buy Bitcoin (BTC) and other top cryptocurrencies. This is not just a ‘small move’ in the state, but also a trendsetter for crypto policies in the United States and even globally. Is Texas really going to gallop and lead the United States to the dominant position in Bitcoin? The Odialy Planet Daily will lead readers to explore the truth.

How does Texas navigate the legal and technical maze of Bitcoin reserves?

Establishing a Bitcoin reserve is not just as simple as buying a Bitcoin hardware wallet. Texas needs to go through a series of legal, regulatory, and technological steps to ensure that this ‘digital treasury’ is firmly established.

According to the latest news, SB 21 bill has passed the Texas Senate with a vote of 25 to 5 on March 6, 2025. This is good news, but don’t rush, this is just the beginning, and the bill needs to go through several steps for successful implementation:

• Step 1: First, the legislative proposal needs to be drafted by state legislators or relevant committees and submitted to the state legislature. The bill includes specific goals for Bitcoin reserves, funding sources, purchasing and management methods, and other details. After the bill is introduced, it is usually assigned to the state legislature’s finance or economic development committee for detailed review, and public hearings may be held to gather various opinions.
• Step 2: Next, the bill needs to be voted on by both houses of the state legislature (if the state is bicameral). First, the state House of Representatives will discuss and vote on it. If it receives a majority vote, it will be sent to the Senate for further deliberation and voting, although some states have the opposite process. Only after both houses pass it can the bill enter the final approval stage. Readers should note that in this article, all references to the House of Representatives and the Senate refer to the state’s House of Representatives and Senate. Generally, state legislation does not require approval from the federal Senate and House of Representatives. (Note: Texas has reached this step now!)
• Step 3: After the bill is passed by both houses of the state legislature, it will be submitted to the governor for signature. If the governor agrees and signs, the bill officially becomes law, and the state government can initiate the implementation of the Bitcoin Strategic Reserve. If the governor vetoes, the legislature can revise or attempt to override the veto with a higher majority (usually a two-thirds majority).
• Step 4: Once the bill takes effect, the state government will designate relevant agencies to implement the reserve plan, usually managed by the state treasury or a dedicated fund management department. They need to develop specific purchasing strategies, choose the appropriate custody method (such as third-party custody or self-custody), and ensure the security of reserve funds. At the same time, the state government needs to establish transparent regulatory and auditing mechanisms and regularly report on the status of Bitcoin reserves to the public or legislative bodies.

If anything goes wrong in any of the above steps, the Bitcoin reserve bill will not pass in that state.

So next, the bill will have to go through intense debate in the House of Representatives (there may be opposition questioning the volatility of Bitcoin), and finally, it will need the governor’s signature to take effect officially. However, according to the latest public information, the bill has been reported as “Engrossed,” meaning it has been sent to the House of Representatives for consideration; There is currently no specific public information on the timing of when it will be voted on in the House of Representatives.

The vote in the House of Representatives may take place in the next 2-4 months (roughly between May and July 2025), but it has not been officially confirmed yet. The actual timing depends on the arrangements and priorities of the House committee. If more specific official timelines are announced, they are usually updated on the Texas Legislature website (capitol.texas.gov) or in relevant news.

In addition, at the technical level, the Texas government plans to have the state comptroller oversee the fund, protecting Bitcoin from threats through cold storage (similar to locking gold bars in a safe, offline storage to prevent hacker attacks); on the investment strategy, the plan is to purchase Bitcoin of up to $5 billion annually. The whole process is like building a digital version of Fort Knox, complicated yet full of potential. Moreover, Texas plans to reduce the risks posed by Bitcoin price volatility or threats to public funds through an advisory committee and strict audits (submitting reports to the state legislature every two years).

Why is Texas taking the lead?

First of all, Texas has a strong advantage in terms of economic scale and policy environment. Texas is the second largest economy in the United States, ranking second in GDP nationwide and able to squeeze into the top ten globally. The strong economic foundation enables Texas to adopt a more open-minded attitude towards new things and be willing to explore, especially in high-risk, high-return areas such as cryptocurrencies. In addition, Texas’s long-standing policy of “low regulation, high freedom” has also attracted a bunch of innovative enterprises, especially in the blockchain and cryptocurrency industries. The “HB 4474 Bill” passed by Texas in 2021 has already incorporated virtual currencies into the commercial legal framework, laying the policy foundation for the subsequent cryptocurrency industry.

Furthermore, Texas’s energy resources and industrial structure also provide support for the cryptocurrency mining industry. Cryptocurrency mining consumes a staggering amount of electricity, and Texas has abundant wind, solar, and natural gas resources, relatively cheap electricity prices, and a high degree of grid independence (the ERCOT system is basically self-sufficient), making it extremely attractive to mining enterprises. Many Bitcoin mining companies, such as Riot Blockchain, have long been rooted in Texas. If the ‘SB 21 Bill’ is truly passed, Texas could also directly invest public funds in cryptocurrencies, further leveraging its energy advantages to attract more players to enter the market.

Riot Blockchain’s bitcoin mining factory in Texas

Secondly, the political direction and the attitude of the leadership also played a role in fueling the fire. Texas’s current governor, Greg Abbott, has always been open to cryptocurrencies, and has even publicly expressed support for related legislation. The initiator of the ‘SB 21 Bill’, Senator Charles Schwertner, also prioritizes the bill, with the backing of industry organizations like the Texas Blockchain Council lobbying behind the scenes. Everyone has the same goal, wanting Texas to become a ‘testing ground’ for crypto reserves, to set rules and capture market share ahead of other states.

Finally, Texas’s culture and history also deserve some credit. The people here have always liked to be different, emphasizing independence, and doing something “anti-mainstream” is not uncommon. In addition, Texas has previously taken a similar path in gold reserves (Texas Bullion Depository) and built the first state-level bullion depository in the United States in 2015, so implementing Bitcoin reserves now is also in line with its consistent style.

The Texas crypto reserve is still far from settled. If it does win, Texas is expected to further widen the gap with other states and become the “leader” in the cryptocurrency field. However, there are also risks, especially given the large fluctuations in cryptocurrency. It remains to be seen whether Texas’s move is bold innovation or a misstep.

The Cryptocurrency Map of the United States: Crazy Adventures in the Field of Digital Currency in Various States (Partially)

Why are states suddenly interested in cryptocurrency reserves?

The enthusiasm of various states in the United States for cryptocurrencies is not groundless. In the past few years, the prices of investment targets such as Bitcoin and Ethereum have skyrocketed, making people envious. In 2021, El Salvador directly designated Bitcoin as legal tender. In 2024, Trump shouted at the Nashville Bitcoin Conference to make the United States the “global capital of cryptocurrency,” and proposed to establish a “Strategic Bitcoin Reserve.” All of these have energized state governments.

Adding the overall economic environment of the United States - high inflation, the questioning of the US dollar hegemony, and the increasing popularity of decentralized finance concepts, states are starting to think: can we innovate with cryptocurrency to attract investment and demonstrate our ‘cutting-edge’ image? Moreover, state governments have always been fiercely competitive, and whoever takes the lead may seize the initiative, whether economically or politically.

Some states’ ‘Crazy Adventure’

Texas: The ‘Cowboys’ Charging at the Starting Line

Texas has always been a big player in the cryptocurrency space. As mentioned above, their Senate just passed the SB 21 bill, aiming to establish the “Texas Strategic Bitcoin Reserve,” allowing public funds to directly invest in cryptocurrencies.

New Hampshire: Highly Potential

The core action of New Hampshire in cryptocurrency reserves is House Bill 302 (HB302), also known as their ‘Bitcoin Reserve Bill.’ The bill was introduced by Republican lawmaker Keith Ammon on January 10, 2025, and received some support from Democratic lawmakers, making it a bipartisan small attempt.

Utah: Low-key but not backward

Utah is also working on Bitcoin reserves and is considered a member of the ‘actively supportive’ camp. They have a characteristic: there is a threshold set in the bill, only cryptocurrencies with a market value of over 500 billion US dollars can be invested, currently Bitcoin meets this criterion. Utah’s logic is more cautious, and it may also be a way to boost technology investment through cryptocurrencies (they already have a bit of a ‘Silicon Valley branch’ vibe).

Arizona: closely following

Arizona is also pushing a Bitcoin reserve bill, second only to Utah. They are moving fast, perhaps aiming to take the lead in the Southwest. Arizona’s crypto community is already active, and the state government also wants to attract more blockchain companies to settle. However, the details of their bill have not been fully disclosed.

The opposition: five states directly say “No”

Not all states are buying it. It is said that there are five states (Montana, South Dakota, North Dakota, Pennsylvania, and Wyoming) that explicitly oppose holding Bitcoin reserves, mainly due to volatility and fiscal compatibility. After all, the state government’s money doesn’t come out of thin air, and they’ve seen cryptocurrencies plummet by 30% overnight. Most of the opposing states are ‘red states’ (Republican strongholds), which is quite surprising. It was originally thought that Trump’s support would bring all the red states on board, but it still depends on the specific financial situation and voter attitudes.

! $500 million investment in Bitcoin reserves, is Texas leading the construction of a crypto utopia?

The state governments in the United States are actively promoting the legislative process of the Startegic Bitcoin Reserve Act (Bitcoin Reserve Fund) status (yellow represents support, black represents opposition)

Conclusion: Who will be the next Bitcoin reserve champion?

Texas’s Bitcoin reserve fund plan has ignited the enthusiasm for encryption in the United States, who will be next? I boldly make a prediction: New Hampshire is the most potential! This “free state” is known for its crypto-friendly policies, state legislators have proposed similar reserve proposals, and the local community’s enthusiasm for Bitcoin is high. Another possibility is Utah, with its blockchain innovation and economic strength making it a potential candidate.

Of course, the complexity of the cryptocurrency market cannot be ignored. Whether it’s the drastic price fluctuations or the uncertainty on the regulatory front, they could potentially become stumbling blocks on the road to cryptocurrency adoption. If other regions want to follow suit, they not only need to draw lessons from the policy framework in Texas but also tailor more robust strategies to their own economic structure.

Looking ahead, the potential of cryptocurrency extends far beyond reserves. For regions aspiring to cultivate the digital economy, supporting innovation in areas such as digital retail and incubation of startups may be the key step to truly unlocking the potential of the Bitcoin market. Who will be the next leader in the Bitcoin market? Let’s wait and see!