Texas is now legally empowered to build its own Bitcoin reserve funded with taxpayer dollars before the federal government takes any comparable action.

Governor Greg Abbott on Saturday signed Senate Bill 21, a law that explicitly allows the state to buy and hold Bitcoin and other top-tier cryptocurrencies.

The measure passed the Texas House and Senate by wide margins, empowering the state comptroller to begin building the reserve immediately.

While the Trump administration recently announced the formation of a “Strategic Bitcoin Reserve,” the two policies differ starkly in substance and intent.

Strategic autonomy or symbolic move?

Backers of the Texas bill, including Lieutenant Governor Dan Patrick and State Senator Charles Schwertner, frame it as a hedge against inflation and a way to cement Texas’s identity as a national leader in crypto.

“Bitcoin’s decentralized nature and fixed supply make it an ideal store of value for the long term,” Schwertner said during debate on the floor. Proponents also point to Bitcoin’s ten-year performance record and growing institutional adoption as reasons to allocate a small but symbolic slice of the state’s rainy day funds.

The Comptroller’s office will hold and manage the Texas reserve, with input from a five-member advisory board. Funding for the reserve can come from legislative appropriations, investment earnings, and private donations.

Critically, the law gives the state authority to actively buy and manage Bitcoin, including holding it as an asset and potentially disposing it strategically.

Some proponents argue that future returns could be generated through yield-bearing mechanisms such as staking or lending, though the bill itself does not explicitly authorize those functions.

Federal effort is more constrained.

The Trump administration’s executive order creating a federal “Strategic Bitcoin Reserve” sparks comparisons, but the two initiatives have little in common beyond the name.

The Federal Bitcoin Reserve is built entirely from Bitcoin seized in criminal investigations. Under the terms of the March 6 executive order, these assets are now off-limits for liquidation but cannot be expanded unless the purchases are “budget-neutral.” That means the federal government will not be buying new Bitcoin anytime soon; it is simply freezing what it has already seized.

Unlike Texas, the Federal Bitcoin Reserve does not have an independent advisory board or a mandate to generate returns on its holdings. Custody remains with the Treasury Department and U.S. Marshals Service, and oversight remains largely internal.

How much Bitcoin could Texas buy?

With its Economic Stabilization Fund, commonly known as the “Rainy Day Fund,” projected to hold between $24 billion and $28.5 billion in 2025, Texas could feasibly allocate hundreds of millions to Bitcoin purchases without putting its fiscal position at risk.

At current market prices, a 1% allocation (roughly $240-$285 million) could net the state around 2,400 to 2,800 BTC. A more aggressive 5% allocation would bring in up to 14,000 coins, making Texas one of the largest sovereign holders of Bitcoin globally.

For comparison, the federal government currently holds approximately 218,000 BTC, based on recent blockchain analytics, though all of it came from seizures rather than purchases.

What happens next

With SB 21 now law, the Texas Comptroller’s office is expected to outline implementation procedures by the end of the fiscal year. Meanwhile, companion legislation (HB 4488) will protect the reserve from being swept into the state treasury for unrelated uses.

As Washington and Austin pursue divergent paths on handling Bitcoin, Texas may now become the first U.S. state to hold the cryptocurrency not because it had to, but because it chose to.

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Investors who added 10% in Bitcoin (BTC) to their “60/40 portfolio” strategies got a 90% risk-adjusted return in the past 12 months, outperforming gold’s 51% return in the same period.

On a June 16 post via X, the profile Ecoinometrics highlighted BTC’s performance through June 13 and charted the result against total return. A 60/40 portfolio is a strategy in which investors allocate 60% of the portfolio’s assets to equities and 40% to fixed-income instruments.

A pure equities index fund earned about 12% with a risk-adjusted ratio of 0.55. Adding bonds dropped the return to roughly 8% and left the risk metric near 0.45. Reallocating 10 bond points to gold pushed the ratio to 0.62 and lifted the return to 12%.

Meanwhile, the same substitution with Bitcoin drove the ratio past 0.80 and elevated the return to 14%. The publication only counted downside deviation, setting the risk-free rate to zero.

Fidelity sees portfolios evolving

Fidelity Digital Assets researcher Chris Kuiper and Fidelity Investments macro director Jurrien Timmer also highlighted the importance of Bitcoin in modern portfolio construction during a new episode of The Value Exchange. 

Kuiper said investors now confront deglobalization, persistent inflation, and policy uncertainty that undermine old allocation playbooks.

Timmer added:

“The status quo we’ve known for decades faces a transactional world order.” 

Both argued that portfolios may need fresh stores of value that operate outside sovereign systems.

Kuiper traced bonds’ nominal compound annual growth to just 1% to 2% over the past decade and noted real drawdowns that reached 55%. Timmer recalled 2022 when treasuries “went from being the port in the storm to bringing the storm.” 

Those outcomes prompted the pair to consider which macro assets could fill the hedging role that bonds once fulfilled. Their answer pointed to scarce digital assets, with Bitcoin foremost.

Bonds’ role weakening 

Kuiper labeled Bitcoin a network asset whose volatility often works in favor of holders. He cited internal modeling that shows price expanding 6x for every 40% rise in the network’s age. 

Timmer built on that framework, arguing that global money supply growth should lift demand for non-sovereign scarcity. Both researchers observed that institutional adoption, although difficult to quantify in real-time, continues to deepen liquidity and smooth execution.

Ecoinometrics’ comparison with gold reinforces that view. An allocation identical in size and funded from the same bond sleeve delivered a markedly lower upgrade to risk-adjusted performance despite gold’s long tenure as a hedge. 

Bitcoin’s outperformance on both axes of return and downside-adjusted risk aligns with the narrative that the asset class now commands consideration alongside precious metals and inflation-protected securities when investors assemble durable multi-asset portfolios.

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According to the company’s announcement on May 7, “Mistral Medium 3 delivers frontier performance while being an order of magnitude less expensive”.

Medium 3 joins the company’s lineup of previous releases, including open-source models like Mistral 7B, Mixtral, Codestral, and Pixtral. However, unlike those earlier models, Medium 3 is not open-source, and users cannot modify or run it on their own devices.

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Medium 3 costs $0.40 per million input tokens and $2 per million output tokens. Reviews by Artificial Analysis rated it as one of the best non-reasoning models available. It competes closely with options like Llama 4 Maverick, Gemini 2.0 Flash, and Claude 3.7 Sonnet.

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Additionally, Medium 3 supports a 128,000-token context window and can process text and images in over 40 languages. This makes it useful for a wide range of tasks, including handling documents and visual content.

Currently, the model is aimed at business use rather than everyday users. It is available through LeChat, Mistral’s chatbot interface, and is designed to work with business systems. Companies can fine-tune it, connect it with internal data, and keep improving it with continuous updates.

Meanwhile, on April 28, OpenAI introduced new features to its AI chatbot, ChatGPT. What are they? Read the full story.