Texas launches cryptocurrency reserve with $5 million Bitcoin purchase

Digital Deals

Texas continues to embrace the controversial digital currency. Photo by Pierre Borthiry - Peiobty on Unsplash

Texas has launched its new cryptocurrency reserve with a $5 million purchase of Bitcoin as the state continues to embrace the volatile and controversial digital currency.

The Texas Comptroller’s Office confirmed the purchase was made last month as a “placeholder investment” while the office works to contract with a cryptocurrency bank to manage its portfolio.

The purchase is one of the first of its kind by a state government, made during a year where the price of Bitcoin has exploded amid the embrace of the digital currency by President Donald Trump’s administration and the rapid expansion of crypto mines in Texas.

“The Texas Legislature passed a bold mandate to create the nation’s first Strategic Bitcoin Reserve,” acting Comptroller Kelly Hancock wrote in a statement. “Our goal for implementation is simple: build a secure reserve that strengthens the state’s balance sheet. Texas is leading the way once again, and we’re proud to do it.”

The purchase represents half of the $10 million the Legislature appropriated for the strategic reserve during this year’s legislative session, but just a sliver of the state’s $338 billion budget.

However, the purchase is still significant, making Texas the first state to fund a strategic cryptocurrency reserve. Arizona and New Hampshire have also passed laws to create similar strategic funds but have not yet purchased cryptocurrency.

Wisconsin and Michigan made pension fund investments in cryptocurrency last year.

The Comptroller’s office purchased the Bitcoin the morning of Nov. 20 when the price of a single bitcoin was $91,336, according to the Comptroller’s office. As of Friday afternoon, Bitcoin was worth slightly less than the price Texas paid, trading for $89,406.

University of Houston energy economist Ed Hirs questioned the state’s investment, pointing to Bitcoin’s volatility. That makes it a bad investment of taxpayer dollars when compared to more common investments in the stock and bond markets, he said.

“The ordinary mix [in investing] is one that goes away from volatility,” Hirs said. “The goal is to not lose to the market. Once the public decides this really has no intrinsic value, then it will be over, and taxpayers will be left holding the bag.”

The price of Bitcoin is down significantly from an all-time high of $126,080 in early October.

Lee Bratcher, president of the Texas Blockchain Council, argued the state is making a good investment because the price of Bitcoin has trended upward ever since it first launched in early 2009.

“It’s only a 16-year-old asset, so the volatility, both in the up and down direction, will smooth out over time,” Bratcher said. “We still want it to retain some of those volatility characteristics because that’s how we could see those upward moves that will benefit the state’s finances in the future.”

Bratcher said the timing of the state’s investment was shrewd because he believes it is unlikely to be valued this low again.

The investment comes at a time that the crypto industry has found a home in Texas.

Rural counties have become magnets for crypto mines ever since China banned crypto mining in 2021 and Gov. Greg Abbott declared “Texas is open for crypto business” in a post on social media.

The state is home to at least 27 Bitcoin facilities, according to the Texas Blockchain Council, making it the world’s top crypto mining spot. The two largest crypto mining facilities in the world call Texas home.

The industry has also come under criticism as it expands.

Critics point to the industry’s significant energy usage, with crypto mines in the state consuming 2,717 megawatts of power in 2023, according to the comptroller’s office. That is enough electricity to power roughly 680,000 homes.

Crypto mines use large amounts of electricity to run computers that run constantly to produce cryptocurrencies, which are decentralized digital currencies used as alternatives to government-backed traditional currencies.

A 2023 study by energy research and consulting firm Wood Mackenzie commissioned by The New York Times found that Texans’ electric bills had risen nearly 5%, or $1.8 billion per year, due to the increase in demand on the state power grid created by crypto mines.

Residents living near crypto mines have also complained that the amount of job creation promised by the facilities has not materialized and the noise of their operation is a nuisance.

“Texas should be reinvesting Texan’s tax money in things that truly bolster the economy long term, living wage, access to quality healthcare, world class public schools,” said state Sen. Molly Cook, D-Houston, who voted against the creation of the strategic fund. “Instead 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.”

State Sen. Charles Schwertner, R-Georgetown, who authored the bill that created the fund, said at the time it passed that it will allow Texas to “lead and compete in the digital economy.”

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This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.

Texas legislators carved out $715 million for nuclear, semiconductor and other economic development projects in the 2025 session. Photo via Getty Images

Here's how Houston's energy and innovation sectors fared in the 2025 Texas legislative session

bills, bills, bills

The Greater Houston Partnership is touting a number of victories during the recently concluded Texas legislative session that will or could benefit the Houston area. They range from millions of dollars for energy projects to billions of dollars for dementia research.

“These wins were only possible through deep collaboration, among our coalition partners, elected officials, business and community leaders, and the engaged members of the Partnership,” according to a partnership blog post. “Together, we’ve demonstrated how a united voice for Houston helps drive results that benefit all Texans.”

In terms of business innovation, legislators carved out $715 million for nuclear, semiconductor, and other economic development projects, and a potential $1 billion pool of tax incentives through 2029 to support research-and-development projects. The partnership said these investments “position Houston and Texas for long-term growth.”

"Nuclear power renaissance"

House Bill 14 (HB 14), for instance, aims to lead a “nuclear power renaissance in the United States,” according to Texas Gov. Greg Abbott’s office. HB 14 establishes the Texas Advanced Nuclear Energy Office, and allocates $350 million for nuclear development and deployment. Two nuclear power plants currently operate in Texas, generating 10 percent of the energy that feeds the Electric Reliability Council Texas (ERCOT) power grid.

“This initiative will also strengthen Texas’ nuclear manufacturing capacity, rebuild a domestic fuel cycle supply chain, and train the future nuclear workforce,” Abbott said in a news release earlier this year.

One of the beneficiaries of Texas’ nuclear push could be Washington, D.C.-based Last Energy, which plans to build 30 micro-nuclear reactors near Abilene to serve power-gobbling data centers across the state. Houston-based Pelican Energy Partners also might be able to take advantage of the legislation after raising a $450 million fund to invest in companies that supply nuclear energy services and equipment.

Reed Clay, president of the Texas Nuclear Alliance, called this legislation “the most important nuclear development program of any state.”

“It is a giant leap forward for Texas and the United States, whose nuclear program was all but dead for decades,” said Clay. “With the passage of HB 14 and associated legislation, Texas is now positioned to lead a nuclear renaissance that is rightly seen as imperative for the energy security and national security of the United States.”

Infrastructure

In the infrastructure arena, state lawmakers:

Approved $265 million for Houston-area water and flood mitigation projects, including $100 million for the Lynchburg Pump Station.
Created the Lake Houston Dredging and Maintenance District.
Established a fund for the Gulf Coast Protection District to supply $550 million for projects to make the coastline and ship channel more resilient.

Dementia institute

One of the biggest legislative wins cited by the Greater Houston Partnership was passage of legislation sponsored by Sen. Joan Huffman, a Houston Republican, to provide $3 billion in funding over 10 years for the Dementia Prevention and Research Institute of Texas. Voters will be asked in November to vote on a ballot initiative that would set aside $3 billion for the new institute.

The dementia institute would be structured much like the Cancer Prevention and Research Institute of Texas (CPRIT), a state agency that provides funding for cancer research in the Lone Star State. Since its founding in 2008, CPRIT has awarded nearly $3.9 billion in research grants.

“By establishing the Dementia Prevention and Research Institute of Texas, we are positioning our state to lead the charge against one of the most devastating health challenges of our time,” Huffman said. “With $3 billion in funding over the next decade, we will drive critical research, develop new strategies for prevention and treatment, and support our healthcare community. Now, it’s up to voters to ensure this initiative moves forward.”

More than 500,000 Texans suffer from some form of dementia, including Alzheimer’s disease, according to Lt. Gov. Dan Patrick.

“With a steadfast commitment, Texas has the potential to become a world leader in combating [dementia] through the search for effective treatments and, ultimately, a cure,” Patrick said.

Funding for education

In the K-12 sector, lawmakers earmarked an extra $195 million for Houston ISD, $126.7 million for Cypress-Fairbanks ISD, $103.1 million for Katy ISD, $80.6 million for Fort Bend ISD, and $61 million for Aldine ISD, the partnership said.

In higher education, legislators allocated:

$1.17 billion for the University of Houston College of Medicine, University of Texas Health Science Center at Houston, UT MD Anderson Cancer Center, and Baylor College of Medicine.
$922 million for the University of Houston System.
$167 million for Texas Southern University.
$10 million for the Center for Biotechnology at San Jacinto College.

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Houston energy expert asks: Who pays when AI outruns the power grid?

Guets Column

For most of the past 20 years, U.S. electricity policy relied on predictable trends in demand. Electricity use, in most regions, increased gradually, forecasts were stable, and utilities adjusted the system in small steps. Power plants, transmission lines, and substations were generally added to reflect shifts in load, rather than growth, and costs were recovered through modest adjustments to customer bills.

Growth in AI data centers has disrupted this model. A single facility can add as much electricity demand as a small town. That demand comes all at once, runs continuously, and has little tolerance for outages. If electricity service drops even briefly, computation stops, and services shut down. Ironically, data centers need reliable service, a point that their emergence is driving concern around for the rest of the grid.

What the numbers say

The International Energy Agency projects global electricity consumption from data centers to double by 2030, reaching roughly 945 TWh, nearly 3 percent of global electricity demand, with consumption growing about 15 percent per year this decade. McKinsey projects that U.S. data center demand alone could grow 20–25 percent per year, with global capacity demand more than tripling by 2030.

After years of roughly 0.5 percent annual demand growth, many forecasts now place total U.S. electricity demand growth closer to 2–3 percent per year through the mid-2030s, with much higher growth in specific regions. In Texas, some forecasters are saying electricity demand could double over the next five years, a staggering 10 percent per year growth rate. What sounds incremental on paper translates into a major challenge on the ground. Meeting this pace of growth is estimated to require $250–$300 billion per year in grid investment, about double what the system has been absorbing.

Where the system starts to strain

The strain appears first in the interconnection queue. It shows up as long waits, backlogs, and delays for connecting new loads and new generation.

Before new generators or large load customers can be connected, a study is required to assess their impact on the grid, whether it can physically handle the added load, and whether upgrades are required. With AI-driven data centers, utilities face far more connection requests than they can realistically support. In ERCOT, large-load interconnection requests exceed 200 gigawatts, most tied to data centers. That amount exceeds historical norms, and it is several times larger than what can be practically studied or built in the near term.

To be clear, public utility commissions are required to study these requests because they must manage system capabilities to ensure minimal disruption. This means engineers spend time evaluating projects that may never be built, while other more commercially viable projects may wait longer for approvals. This extends timelines and makes infrastructure planning less reliable.

Why policymakers are rethinking the rules

Utilities and their regulators must decide how much generation, transmission, and substation capacity to build years before it comes online. Those decisions are based on expected demand at the time projects are approved. When it comes to data centers, by the time infrastructure is completed, they may end up deploying newer, more efficient chips that use less power than originally assumed. This can result in grid infrastructure built for a higher load than what actually materializes, leaving excess capacity that still must be paid for through system-wide rates.

That’s the central dilemma. If utilities build too little capacity, the system operates with less reserve margin. During periods of grid stress, operators have fewer options, increasing the likelihood of curtailments or outages. However, if utilities build too much, customers may be asked to pay for infrastructure that is not fully used.

In response, policymakers are adjusting the rules. In some regions, regulators are moving toward bring-your-own-power approaches that require large data centers to supply or fund part of the capacity needed to serve them or reduce demand during system stress. At the federal level, permitting reforms tied to datacenter infrastructure increasingly treat electricity as a strategic economic input.

As Ken Medlock, senior director at the Baker Institute Center for Energy Studies (CES), explains:

“Many of the planned data centers are now also adding behind-the-meter options to their development plans because they do not anticipate being able to manage their needs solely from the grid, and they certainly cannot do so with only intermittent power sources.”

Behind-the-meter (BTM) refers to power that a consumer controls on its side of the utility meter, such as on-site gas generation or a dedicated power plant. These resources allow data centers to keep operating during grid-related service. Most facilities remain connected to the grid, but the backup BTM generation serves as insurance for operating their core business.

This shifts responsibility. Utilities traditionally manage reliability across all customers by maintaining an operating reserve margin, or spare capacity. Increasingly, large-load customers manage part of their own electricity reliability needs, which changes how infrastructure is planned and how risk is distributed.

Bottom line

AI-driven load growth is arriving faster and in more concentrated places than the power system was built to accommodate. Utilities and regulators are being forced to make decisions sooner than planned about where to build, how fast to build, and which customers get priority when capacity is limited. The effects extend beyond data centers, showing up in system costs, reliability margins, competition for grid access, and pressure on communities and industries that depend on affordable and dependable power. The issue is not whether electricity can be generated, but how the costs and risks of rapid demand growth are distributed as the system tries to keep up. How regulators balance these decisions will determine who pays as AI demand outruns the power grid.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally appeared on LinkedIn.

Texas solar set to overtake coal for first time in 2026, EIA forecasts

solar on the rise

Solar power promises to shine even brighter in Texas this year.

A new forecast from the U.S. Energy Information Administration (EIA) indicates that for the first time, annual power generation from utility-scale solar will surpass annual power generation from coal across the territory covered by the Electric Reliability Council of Texas (ERCOT).

Solar generation is expected to reach 78 billion kilowatt-hours in 2026 in the ERCOT grid, compared with 60 billion kilowatt-hours for coal, the EIA forecast says. The ERCOT grid supplies power to about 90 percent of Texas, including the Houston area.

“Utility-scale solar generation has been increasing steadily in ERCOT as solar capacity additions help meet rapid electricity demand growth,” the forecast says.

Although natural gas remains the dominant source of electricity generation in ERCOT, accounting for an average 44 percent of electricity generation from 2021 to 2025, solar’s share of the generation mix rose from four percent to 12 percent. During the same period, coal’s share dropped from 19 percent to 13 percent.

EIA predicts about 40 percent of U.S. solar capacity, or 14 billion kilowatt-hours, added in 2026 will come from Texas.

Although EIA expects annual solar generation to exceed annual coal generation in 2026, solar surpassed coal in ERCOT on a monthly basis for the first time in March 2025, when solar generation totaled 4.33 billion kilowatt-hours and coal’s totaled 4.16 billion kilowatt-hours. Solar generation continued to exceed that of coal until August of that year.

“In 2026, we estimate that solar exceeded coal for the first time in March, and we forecast generation from solar installations in ERCOT will continue to exceed that from coal until December, when coal generation exceeds solar,” says EIA. “We expect solar generation to exceed that of coal for every month in 2027 except January and December.”

For 2027, EIA forecasts annual solar generation of 99 billion kilowatt-hours in the ERCOT grid, compared with 66 billion kilowatt-hours of annual coal generation.

In April, ERCOT projected almost 368 billion kilowatt-hours of demand in ERCOT’s territory by 2032. ERCOT’s all-time peak demand hit 85.5 billion kilowatt-hours in August 2023.

“Texas is experiencing exceptional growth and development, which is reshaping how large load demand is identified, verified, and incorporated into long-term planning,” ERCOT President and CEO Pablo Vegas said. “As a result of a changing landscape, we believe this forecast to be higher than expected … load growth.”

Houston startup raises $12M to commercialize quantum energy chip technology

seed funding

Houston-based Casimir has emerged from stealth with a $12 million seed round to commercialize its quantum energy chip.

The round was led by Austin-based Scout Ventures. Lavrock Ventures, Cottonwood Technology, Capital Factory, American Deep Tech, and Tim Draper of Draper Associates also participated in the round. The oversubscribed round exceeded the company’s original $8 million target, according to a news release.

Casimir’s semiconductor chips can generate power from quantum vacuum fields without the need for batteries or charging. The company plans to commercialize its first-generation MicroSparc chip by 2028.

The MicroSparc chip measures 5 millimeters by 5 millimeters and is designed to produce 1.5 volts at 25 microamps, comparable to a small rechargeable battery, without degradation and no replacement cycle.

“Casimir represents exactly the kind of breakthrough dual-use technology Scout Ventures was built to back,” Brad Harrison, founder and managing partner at Scout Ventures, said in the release. “This is based on 100 years of science and we’re finally approaching a commercial product … We’re proud to lead this round and support Casimir’s journey from applied science to deployed technology.”

Casimir says it aims to scale its technology across the ”full power spectrum,” including large-scale energy systems that can power homes, commercial infrastructures and electric vehicles.

Casimir's scientific work has been supported by DARPA-funded nanofabrication research and its technology was incubated at the Limitless Space Institute (LSI). LSI is a nonprofit that works to innovate interstellar travel and was founded by Kam Ghaffarian. Technology investor and serial entrepreneur Ghaffarian has been behind companies like X-energy, Intuitive Machines, Axiom Space and Quantum Space.

Harold “Sonny” White, founder and CEO of Casimir, believes the technology can power devices for years without replacements.

“Millions of devices will operate for years without a battery ever needing to be replaced or recharged because we have engineered a customized Casimir cavity into hardware capable of producing persistent electrical power,” White added in the release. “I spent nearly two decades at NASA studying how we power humanity’s future. That work led me to the Casimir effect and the quantum vacuum, where new tools have allowed us to build on a century of scientific knowledge and bring abundant power to the world.”

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This article originally appeared on our sister site, InnovationMap.com.

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