Bitcoin Gains Support as Texas Fund Buys ETFs, Nasdaq Eyes Options Boost
A $5 million state-backed investment and a proposal to expand options trading signal growing institutional conviction in the crypto asset class amid market volatility.
The cryptocurrency sector is receiving a dual boost from institutional and state-level adoption, providing a vote of confidence after a month of intense market volatility. A Texas state investment fund has made its first direct foray into Bitcoin, while Nasdaq is moving to significantly expand the trading capacity for options tied to the asset.
The Texas Permanent School Fund (PSF), a $57 billion state endowment that supports public education, disclosed a $5 million investment in BlackRock's iShares Bitcoin Trust (IBIT), one of the leading spot Bitcoin exchange-traded funds. The purchase, which took place on November 20, marks a pioneering move by a major state-run fund to add direct Bitcoin exposure to its portfolio.
This investment is the first step in a larger $10 million strategic allocation to Bitcoin approved by state legislators in June. The fund's strategy includes a plan to eventually hold the remaining $5 million in Bitcoin directly in self-custody, signaling a long-term conviction in the digital asset as a diversifying hedge. Using the ETF structure provides the state with regulated exposure while it finalizes its framework for direct ownership, according to public reports.
The move by Texas comes during a turbulent period for the digital asset market. Bitcoin's price fell from a high of over $126,000 in October to below $85,000 in November, pushing market sentiment to a state of 'extreme fear,' according to the Crypto Fear & Greed Index. The investment by a large, conservative state fund during this downturn is being interpreted by analysts as a significant indicator of institutional staying power.
Further bolstering the case for crypto's market maturation, the Nasdaq ISE exchange has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to dramatically increase the trading limits for options on BlackRock's IBIT. The proposal, detailed in a federal filing, seeks to quadruple the position and exercise limits for IBIT options from 250,000 contracts to 1,000,000.
In its filing, Nasdaq argued that the current limits are insufficient to meet surging institutional demand and inhibit the ability of market makers to provide deep liquidity and tighter spreads. "The Exchange has observed a continuous increase in demand for IBIT options throughout 2025," the proposal stated, noting the change would allow for more robust trading and hedging strategies.
This proposed expansion follows a previous tenfold increase in July, highlighting the rapid growth and acceptance of crypto-based derivatives in mainstream finance. BlackRock's IBIT has been a primary beneficiary of this trend, recently surpassing $100 billion in assets under management. The fund saw net inflows of $83 million on November 25 alone, contributing to a broader positive trend for spot Bitcoin ETFs after a period of significant outflows earlier in the month.
Together, the Texas investment and Nasdaq's proposed rule change underscore a deeper structural shift in how institutional investors and even state-level entities are approaching digital assets. While retail sentiment can be swayed by sharp price swings, these moves point toward the steady construction of a more sophisticated and liquid market infrastructure, paving the way for broader and more complex institutional involvement.