How to Buy Crypto in Texas

History of Bitcoin in Texas

Although bitcoin mining was not outlawed in China until 2021, the push by miners into Texas started a couple of years earlier. Texas is able to offer extremely cheap electricity prices, which is the main consideration for those who are looking to lower the costs associated with their mining activities. Chinese mining firms, such as Bit Mining Limited, started to expand into Texas once they saw the writing on the wall back in early 2021, but other, United States-based miners, such as Layer1 Technologies, had already started building up their facilities in early 2020. Notably, bitcoin mining has helped some producers of natural gas make use of extra energy resources that would have otherwise gone to waste.

Once the bitcoin miners had made their way to Texas, it became obvious to lawmakers that this booming industry needed to be embraced. By the summer of 2021, Texas Governor Greg Abbott was signing a bill into law that was focused on laying out clear regulations for expanding Texas’s role in the crypto and blockchain ecosystem. While other states, such as New York, have made the mistake of enacting more restrictive regulations around the use of Bitcoin by businesses and individuals, Texas took the approach of clearly defining how digital assets fit into many of the various laws and policies that already existed on the books.

At the same time that bitcoin mining was taking off in Texas and there was much greater clarity around the legality of various crypto activities in the state, Austin was enjoying massive growth as a tech hub. Many of those who moved to Austin during this time had become tired of the high tax rates in California that did not seem to be providing a strong return on investment to those who lived in the state. There are now a large number of Bitcoin companies based in Austin, and many conferences and crypto-focused events have also taken place in Texas over the years. Of course, it should be noted that one of the earliest annual Bitcoin conferences, the Texas Bitcoin Conference, has been operating long before Bitcoin was on any sort of mainstream radar.

Is It Legal to Buy Cryptocurrency in Texas?

It is very much legal to purchase bitcoin and other cryptocurrencies in Texas. There is not much to worry about in terms of the law when it comes to buying bitcoin; however, those who are making a business out of buying and selling bitcoin will need to follow the same sorts of laws that are found in other areas of finance. For example, capital gains taxes will need to be paid at the federal level on gains made while residing in the state of Texas, and anyone who is operating as an exchange of sorts will need to collect personal information from their customers for anti-money laundering purposes.

In terms of Bitcoin-related laws that are specific to Texas, there have been two bills passed by the legislature and signed into law by the governor that are intended to cultivate a pro-Bitcoin environment for those who wish to do business in the state. Both of these bills were introduced by Texas State Representative Tan Parker.

The first bill that was passed in Texas was HB 1576, which developed the Texas blockchain work group. The point of this work group is effectively to research opportunities in the blockchain industry and figure out different ways to promote the development of more Bitcoin and crypto businesses in the state. For the most part, this working group will focus on breaking down potential barriers to progress for the blockchain industry in Texas and making sure that the state becomes a major hub of the crypto industry. Texas is off to a tremendous start in this regard, as Austin has already become a sort of unofficial headquarters of the Bitcoin industry over the past few years.

The other bill introduced by Parker was HB 4474. This bill was mostly focused on creating a legal framework for bitcoin and other crypto assets in the state of Texas. It was intended to provide regulatory clarity to those who wish to build Bitcoin businesses in the state, and it was based on a similar bill that was passed in the state of Wyoming back in 2019.

Have There Been Any Crypto Issues in Texas?

The one area where Texas has been more restrictive than most states regarding crypto is the area of crypto lending.

Crypto lenders such as BlockFi, Celsius Network and Nexo have found success by giving users APY on their crypto. They essentially work as high-yield savings accounts for crypto users.

Various states, including New Jersey and Alabama, have taken issue with crypto lenders, however, saying that they might violate state securities laws.

Texas has issued warnings to BlockFi and Celsius Network in the past and at the time of publication those entities weren’t accepting new users.

There’s a good chance these issues get fixed, however, as more clarity is provided by regulators on crypto lending platforms.

What is the Best Way to Get Cryptocurrency in Texas?

Due to the regulatory clarity and legality of bitcoin in Texas, it is extremely easy to purchase crypto assets in this state. Any of the major exchanges that operate in the United States will be happy to take customers from this state.

If you are new to the world of bitcoin and crypto, then you will likely want to start with a reputable exchange that has a user-friendly interface and makes it easy to make your first purchase. Two of the best options in that regard are Binance and Coinbase. That said, if you are a Binance user in Texas, then it is important to note that you will need to use the Binance.US platform instead of the base exchange found at Binance.com.

If you are looking to use a brokerage-esque platform that makes it as easy as possible to make your first crypto purchase, then you’ll want to opt for Coinbase. These sorts of platforms with simpler buy and sell options tend to come with higher fees, but they’re also much easier to use than some of the more advanced trading platforms. Of course, if you have the Cash App, you can also easily make your first bitcoin purchase there and even make bitcoin-denominated payments via the Lightning Network.

If you are looking for the cheapest way to purchase bitcoin and other cryptocurrencies in Texas, then your main concern should be the fees charged for trading on your exchange of choice. These days, Binance and FTX are two of the best options on the market. Additionally, Strike is a relatively newer entrance into the market; however, there are lower limits on how much bitcoin you can buy per week on this platform. It should also be noted that Strike is a bitcoin-only app, which means you won’t be able to purchase ether, litecoin, dogecoin, or any other altcoin from them.