Texas has declared Bitcoin legal tender, a first for a U.S. state, following legislation signed by Governor Greg Abbott. Effective immediately, businesses must accept Bitcoin for goods and services, positioning Texas as a Bitcoin hub. The law leverages the state’s pro-Bitcoin stance, building on its mining-friendly policies. With Bitcoin trading at $97,000, the move has sparked a 5% price surge, as investors anticipate increased demand.

The Texas Treasury will hold 10,000 BTC, valued at $970 million, as a state reserve, mirroring the U.S. Strategic Bitcoin Reserve’s 200,000 BTC. Proponents, including Senator Ted Cruz, argue this enhances financial freedom and attracts tech firms. Critics, like economist Paul Krugman, warn of volatility risks and tax compliance issues.

Businesses are scrambling to integrate Bitcoin payment systems, with major retailers like H-E-B piloting BTC checkouts. The law exempts Bitcoin transactions from state sales tax, incentivizing use. Analysts predict Texas’ move could inspire states like Florida, with Standard Chartered forecasting Bitcoin hitting $120,000 by Q3 2025. The U.S. Strategic Bitcoin Reserve, launched March 6, 2025, has already tightened supply, and Texas’ reserve adds pressure.

Investors should monitor adoption rates and infrastructure growth, as payment processors like BitPay report a 20% uptick in Texas-based transactions. Consumer education campaigns are underway to ease adoption, but cybersecurity concerns linger. Texas’ bold step could redefine Bitcoin’s role in U.S. commerce, driving mainstream acceptance.