The state of Texas has officially entered the cryptocurrency arena, and not everyone is convinced it's a good move.
In early December 2025, Texas confirmed a $5 million purchase of bitcoin. As The Texas Tribune detailed, this marks the first investment in its newly created Strategic Bitcoin Reserve and has made Texas the first U.S. state to fund a cryptocurrency reserve.
The investment stems from legislation passed earlier in the year that dedicated $10 million to creating a state-managed crypto reserve.
As the Texas Comptroller's Office told The Dallas Morning News, the $5 million purchase was made on November 20 as a "placeholder investment" while the state works to contract with a cryptocurrency bank to send the portfolio overseas.
This milestone has generated praise from the crypto community and concern from crypto critics who are wary of volatility and environmental impacts.
Kelly Hancock, the acting Comptroller, framed the decisions as a smart financial strategy.
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"The Texas Legislature passed a bold mandate to create the nation's first Strategic Bitcoin Reserve," Hancock said, per the Tribune, adding that the goal is to "build a secure reserve that strengthens the state's balance sheet."
However, economists and lawmakers have raised red flags. University of Houston energy economist Ed Hirs criticized the move, mentioning that bitcoin is prone to price swings.
"The ordinary mix (in investing) is one that goes away from volatility," he told the Tribune.
State Senator Molly Cook, who voted against creating the reserve, summed up this concern by telling the publication, "It feels like they're 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."
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Besides the financial risks, the investment has faced scrutiny for its environmental implications.
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It is the future of currency 😎 Texas has become a hub for bitcoin mining, with at least 27 facilities that collectively consumed 2,717 megawatts of electricity in 2023. That's enough to power hundreds of homes.
Critics argue that this demand strains the power grid and raises electricity costs. Supporters say that crypto mines can actually help stabilize grids and even finance renewable energy projects when paired with clean power sources.
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