Led by Texas and New Hampshire, US states on the national map, both red and blue in political colors, are developing strategic Bitcoin reserves and integrating cryptocurrencies into their books through additional financial and budgetary measures.
Texas recently became the first state to purchase bitcoin after a legislative effort that began in 2024, but many states have joined the “race to the reserve” to pass legislation that will eventually allow them to purchase cryptocurrencies.
New Hampshire passed its Crypto Strategic Reserves Act last May, even before Texas, giving the state treasurer the authority to invest up to 5% of state funds in crypto ETFs, although the purchase of precious metals such as gold is also allowed. Arizona has passed similar legislation, while Massachusetts, Ohio and South Dakota have laws in different stages of committee review.
Although much of the legislation is largely sponsored or co-sponsored by Republicans, crypto adoption at the state level is not expected to fall strictly along party lines. The 2024 election cycle was the first time the cryptocurrency industry played a major role in lobbying in state and national elections. In fact, it was the largest corporate donor during an election cycle, with support provided to candidates on both sides. It is already a war chest for the 2026 midterm elections.
Congress is currently debating a crypto market structure bill, and state-level politicians want to prove that they and their states will not be left out of the digital asset boom. Justin Marlowe, a professor of public policy at the University of Chicago, sees the current trend at the state level as largely about signaling. “If you’re a governor and you want to show that you support the development of innovative businesses in the digital economy, these are relatively low-cost, low-risk ways to send that signal. That’s why we’ve seen leaders across the ideological spectrum and across the country taking concrete steps in that direction,” he said.
Where state-level crypto efforts can be described as “bigger steps” — Marlowe cited Texas, Arizona and Florida as examples — he said it helped recognize the growing political power of crypto advocates in those states.
Similarities in actions taken to date across states include authorizing the state treasurer or other investment official to authorize the investment of a limited amount of state funds in crypto and establishing the necessary governance structure for investing in crypto. This will often involve more frequent reporting requirements and stricter custody arrangements compared to traditional asset classes. Bootstrapping the reserve can take the form of using cash or cryptocurrencies seized by the government, as in the recent case of the federal government. President Donald Trump signed an executive order to create a strategic bitcoin reserve last March, but limited permission to seize cryptocurrencies in an effort to show that taxpayers would bear no financial burden.
It’s no surprise that Texas was the first state to fund a crypto reserve. Texas has been a crypto hub for years thanks to its role in bitcoin mining. Affordable and flexible state power, as well as a largely pro-crypto political environment, have led Texas in recent years to an important position in not only the national, but also the global bitcoin hashing market.
“Texas has spent the last few years becoming one of the key centers of Bitcoin activity, particularly on the mining side,” said Christian Catalini, founder of the MIT Cryptonomics Lab, viewing the move as one of the first marks of the state being “open for business” when it comes to digital assets.
“Once you’ve made that bet on infrastructure and industry, adding some exposure to Bitcoin at the treasury level is a natural next step,” Catalini said. Such an approach essentially ensures that the state’s balance sheet is explicitly aligned with the ecosystem it aims to attract.
Texas also has a long history with bitcoin’s traditional market competitor: gold.
“Texas has proven to be a bedrock of government adoption of bitcoin, starting with laws allowing legal custody arrangements similar to the gold storage laws that are well established there,” said Nik Bhatia, founder of The Bitcoin Layer.
When it comes to storing physical gold, Texas has clear rules on storage and ownership, and even the language invoked – vaults, custodians – helps grease the wheels of crypto assets at the state level. The 2015 Texas Bullion Depository, which allowed for state-level depository of bullion and precious metals, was specifically adapted to apply to digital assets like bitcoin. The Texas Bullion Depositary was the nation’s first state-run precious metals depository.
Texas has not purchased any bitcoin on-chain. After passing legislation to create a strategic bitcoin reserve authorizing the state comptroller to hold the cryptocurrency, Texas purchased a stake in a bitcoin ETF – about $5 million in the largest bitcoin ETF, the black rock iShares Bitcoin Trust (IBIT), which since its launch in January 2024 has reached more than $72 billion in assets under management.
The comptroller’s office made its purchase on the morning of November 20, 2025, when the price of a single bitcoin was $91,336. From Saturday morning, bitcoin was trading at just over $95,000.
Bhatia said the SEC’s approval of Bitcoin ETFs was crucial for the state to consider being comfortable with the holdings under current U.S. securities law. “Using ETFs is a very clean and safe way to invest in bitcoin, minimizing the logistical risks of storage and opting for security law protection,” Bhatia said.
Texas state officials described the purchase — which deployed only half of the $10 million set aside by the Texas Strategic Bitcoin Reserve — as a “placeholder” while security and storage of raw bitcoin can be put in place.
Crypto’s Evolution to Government Finance and Budgeting
In addition to the reserve fund concept, states are integrating crypto into core financial functions, with an approach that balances the inherent apprehension of venturing into new terrain with the desire to be part of the rapidly evolving crypto field.
New Hampshire, for example, became the first state to approve the issuance of a bitcoin-backed municipal bond last November, a $100 million issuance that would mark the first time the cryptocurrency has been used as collateral in the U.S. municipal bond market. The deal hasn’t been finalized yet, but the show is expected to take place this year. “The idea is that they will use bitcoin to support a municipal bond issue, the proceeds of which will then be divided into loans to small governments for economic development projects across the state,” Marlowe said. The repayment of these loans will make it possible to recapitalize the fund.
It’s a creative evolution of state finances, but like many state-level crypto development mechanisms, it uses existing financial structures and state goals, according to Marlowe, with similar state bonds in previous decades used for projects such as clean water, school upgrades and other infrastructure. “What’s different here is that the collateral is Bitcoin rather than taxpayer money,” he said.
In many states, including Colorado, Utah, and Louisiana, crypto is now accepted as a means of payment for taxes and other state business. As state public finance crypto efforts grow, this shift represents a shift in a fundamental philosophy of security and liquidity that has dominated the investment of state and local funds for centuries.
Over the past few decades, assets such as real estate and private equity have expanded the investment approach of public funds, but crypto represents not only the most recent addition, but also the most volatile.
“For many in the national and local investment industry, cryptocurrency-backed assets are still far too speculative and volatile for public money,” Marlowe said. “But others, and I think there’s sort of a generational shift happening, see it as a reasonable store of value that’s actually stronger on many other public sector values like transparency and asset integrity,” he added.
