South Dakota just slammed the brakes on Bitcoin investments, rejecting a proposal to add the cryptocurrency to state reserves, mirroring a similar move in Montana. The House Commerce and Energy Committee voted 9-3 to defer HB1202 to the 41st day of the legislative session—a procedural action that effectively terminates the bill, as the session concludes in no more than 40 days.
The proposed legislation, introduced by State Representative Logan Manhart, aimed to allow South Dakota to allocate up to 10% of its public funds into Bitcoin as a strategy to diversify the state’s financial portfolio. Manhart described the bill as a “commonsense update” to the state’s investment approach, particularly in response to inflationary pressures.
However, concerns were raised regarding Bitcoin’s volatility and its lack of intrinsic value. Matt Clark, South Dakota’s State Investment Officer, expressed reservations, stating,
“We do view Bitcoin as a volatile, speculative asset. Regardless, Bitcoin does not generate any income much like commodities or other kinds of assets, perhaps collectibles or other things, rare coins, etc.”
Manhart disagreed, arguing that Bitcoin is an asset the state could take advantage of.
“It has been described as digital gold as we’ve heard about it. It is not a Ponzi scheme. Bitcoin itself is a decentralized, fixed supply asset. Excluding Bitcoin due to many of the concerns you’ve heard I believe you’re missing out,” Manhart said.
This decision follows a similar outcome in Montana, where lawmakers recently voted 41-59 against a bill proposing the inclusion of Bitcoin in the state’s investment reserves. Both states’ rejections reflect a cautious approach toward integrating cryptocurrency into public investment strategies, highlighting concerns over market volatility and the nascent nature of digital assets.
National Context and Industry Trends
Despite these setbacks at the state level, there is a growing national discourse on the role of Bitcoin in government reserves. President Donald Trump has reiterated plans to establish a U.S. Bitcoin strategic reserve, aiming to position the nation as a leader in the global cryptocurrency landscape. This proposal suggests a federal-level interest in adopting Bitcoin, contrasting with the hesitancy observed in individual states.
Also, while states like South Dakota, Montana, North Dakota, Wyoming, and Pennsylvania have recently stalled or rejected Bitcoin reserve proposals, the momentum for integrating Bitcoin into state treasuries is far from over. In fact, several other states are pushing forward with their own plans to adopt Bitcoin as part of public investment strategies.
According to Bitcoin Reserve Tracker, about 18 state-level Bitcoin reserve proposals remain pending. States like Florida, Arizona, Utah, and Texas are actively advancing legislation that could pave the way for Bitcoin to be included in their financial portfolios. These ongoing efforts highlight a fragmented but persistent interest in Bitcoin adoption at the state level, even as others hit the brakes.
Amid these legislative developments, Bitcoin faced fresh market turbulence on Monday. Heightened trade concerns and a steep sell-off in technology stocks triggered a broader risk-off sentiment across global markets, leading to a pullback in major cryptocurrencies. Bitcoin dropped 3.9% on the day, falling to $91,980, as investors fled riskier assets in favor of safer options.
Quick Facts:
- South Dakota’s state’s House Commerce and Energy Committee voted 9-3 to defer a bill allowing Bitcoin investments, effectively killing the proposal.
- Montana lawmakers recently voted 41-59 against a bill to include Bitcoin in state reserves.
- Federal Interest: President Trump has proposed creating a U.S. Bitcoin strategic reserve, signaling potential federal-level adoption.
- While some states reject Bitcoin reserve proposals, others like Illinois, Utah etc., are actively considering legislation to incorporate Bitcoin into their financial strategies.
