States across the red and blue political stripes on the U.S. map, led by Texas and New Hampshire, are developing strategic reserves for Bitcoin and bringing the cryptocurrency onto their books through additional state fiscal and budgetary measures.
Texas recently became the first state to buy Bitcoin after a legislative effort that began in 2024, but many states are participating in a “race to the ground” to finally pass legislation that would allow the purchase of the cryptocurrency.
Last May, New Hampshire passed the Cryptocurrency Strategic Reserve Act, ahead of Texas, giving the state’s treasurer the power to invest up to 5% of the state’s funds in crypto ETFs, but also the purchase of precious metals such as gold. Arizona passed a similar bill, while Massachusetts, Ohio and South Dakota have bills in various stages of committee review.
Although many of the bills are primarily sponsored or co-sponsored by Republicans, the introduction of cryptocurrencies at the state level is not expected to fall strictly along party lines. The 2024 election cycle marked the first time that the cryptocurrency industry played a major role in lobbying for both state and national elections. In fact, it was the largest corporate donor during the campaign, supporting candidates on both sides. He is already accumulating military funds for the 2026 midterm elections.
Congress is currently considering a cryptocurrency market structure bill, and state-level politicians are working hard to prove that they and their states will not be left out of the digital asset boom. Justin Marlowe, a public policy professor at the University of Chicago, sees current state-level trends as largely signaling trends. “If you’re a governor and you want to signal that you’re open to innovative business development in the digital economy, these are relatively low-cost, low-risk ways to send a signal. That’s why we’ve seen leaders across the ideological spectrum take concrete steps in this direction,” he said.
Marlowe cited Texas, Arizona, and Florida as examples of state-level crypto initiatives that he said are “a huge step” that have helped acknowledge the growing political power of crypto advocates in those states.
Similarities in the actions taken by states to date include authorizing state treasurers and other investment authorities to invest limited amounts of public funds in cryptocurrencies and creating the necessary governance structures to invest in cryptocurrencies. This often requires more frequent reporting requirements and stronger custody agreements compared to traditional asset classes. As in the recent federal case, seeding reserves can take the form of cash or the use of government-seized cryptocurrencies. Last March, President Donald Trump signed an executive order creating the Strategic Bitcoin Reserve, but limited its power to seize the cryptocurrency to demonstrate there would be no financial burden on taxpayers.
It is no surprise that Texas is the first state to fund a virtual currency reserve. Texas has long served as a center for cryptocurrencies through its role in Bitcoin mining. Due to the state’s affordable and flexible power and largely pro-cryptocurrency political environment, the state has gained a significant position in the national and global Bitcoin hash market in recent years.
“Texas has become one of the key centers of Bitcoin activity in recent years, especially on the mining side,” said Christian Catalini, founder of the MIT Cryptoeconomics Institute, who sees the move as an early branding of the state as “open for business” when it comes to digital assets.
“Once you bet on infrastructure and industrials, adding Bitcoin exposure at a financial level is a natural next step,” Catalini said. Such a move essentially brings the state’s balance sheet more clearly aligned with the ecosystem it seeks to attract.
Texas also has a long history with gold, Bitcoin’s traditional market competitor.
“Texas has proven to be a cornerstone of government adoption of Bitcoin, starting with a law that allows for legal custody arrangements similar to the gold custody laws established there,” said Nick Bhatia, founder of Bitcoin Layer.
When it comes to physical gold storage, Texas has clear rules regarding storage and ownership, and even the terms vault and custodian are helping to promote crypto assets at the state level. The Texas Bullion Depository of 2015 enabled the storage of bullion and precious metals at the state level, making it particularly applicable to digital assets such as Bitcoin. The Texas Bullion Depository was the first state-controlled precious metals depository in the United States.
Texas is not buying on-chain Bitcoin. After passing a bill creating the Strategic Bitcoin Reserve and authorizing the state comptroller to hold the virtual currency, Texas bought shares in a Bitcoin ETF (approximately $5 million in the largest Bitcoin ETF). black rock iShares Bitcoin Trust (ibit), since its establishment in January 2024, has grown to over $72 billion in assets under management.
The Comptroller made the purchase on the morning of November 20, 2025, when the price of one Bitcoin was $91,336. As of Saturday morning, Bitcoin It was trading for just over $95,000.
Bhatia said the SEC’s approval of Bitcoin ETFs is critical to the nation’s plan to make holdings comfortable under current U.S. securities laws. “Using ETFs is a very clean and safe way to invest in Bitcoin, minimizing storage logistics risks and opting for security law protection,” Bhatia said.
Texas officials described the purchase (using only half of the $10 million secured by the Texas Strategic Bitcoin Reserve) as a “placeholder” to ensure the security and storage of raw Bitcoin.
The entry of virtual currency into the core of national finance and budgeting
In addition to the concept of reserves, states are implementing cryptocurrencies into their core financial functions with approaches that balance the anxiety inherent in venturing into new territory with the desire to be part of the rapidly changing crypto space.
For example, New Hampshire last November became the first state to approve the issuance of municipal bonds backed by Bitcoin. The issuance amount is $100 million, and it will be the first time that cryptocurrencies will be used as collateral in the U.S. municipal bond market. No deals have taken place yet, but it is expected to be issued this year. “The idea is to use Bitcoin to support municipal bond issuance and distribute the proceeds to lend to small governments for economic development projects across the state,” Marlowe said. Repaying these loans increases the capital of the Fund.
Marlow said this is a creative evolution in state finance, but like many of the mechanisms for cryptocurrency development at the state level, it leverages existing fiscal structures and state goals, with similar bonds from past decades being used for projects like water, school upgrades and other infrastructure. “The difference here is that Bitcoin is used as collateral instead of taxpayer money,” he said.
Many states, including Colorado, Utah, and Louisiana, now accept cryptocurrencies as payment for taxes and other state businesses. As state finances move further into cryptocurrencies, this shift represents a shift in the core philosophies of safety and liquidity that have governed state and local financial investments for centuries.
In recent decades, assets including real estate and private equity have expanded the investment approach of public funds, but cryptocurrencies are not only the most recent addition, but also the most volatile.
“For much of the state and local investment community, crypto assets remain too speculative and volatile for public funds,” Marlowe said. “But others, I think there’s a kind of generational shift going on, see it as a reasonable store of value that has actually reinforced a lot of other public sector values, like transparency and asset integrity,” he added.
