- South Dakota and Montana legislatures have dismissed bills proposing the investment of state funds in Bitcoin
- Both states cited concerns over the cryptocurrency’s volatility and regulatory uncertainties
- These decisions reflect a cautious approach toward integrating digital assets into public investment portfolios
In recent legislative sessions, both South Dakota and Montana have turned down proposals to allocate a portion of state funds to Bitcoin investments. The primary reasons for these rejections include apprehensions about the inherent volatility of cryptocurrencies and the ambiguous regulatory environment surrounding digital assets. These outcomes highlight the challenges state governments face when considering the incorporation of cryptocurrencies into their financial strategies.
No Bitcoin Strategic Reserves…Yet
On February 24, 2025, the South Dakota House Commerce and Energy Committee effectively halted House Bill 1202, which aimed to permit the state to invest up to 10% of its public funds in Bitcoin. The committee voted to defer the bill to the 41st legislative day, a procedural move that effectively kills the bill, as the session comprises only 40 days.
Representative Logan Manhart, who introduced the bill, expressed his intention to reintroduce the legislation in future sessions, stating, “The only thing that is risky is not passing this bill.”
Similarly, Montana’s House of Representatives voted against House Bill 429, which proposed the creation of a state Bitcoin reserve by investing in digital assets, precious metals, and stablecoins. The bill was defeated in a 41-59 vote, with opponents citing the speculative nature of cryptocurrencies as a significant concern. Representative Steven Kelly voiced his reservations, stating, “It’s still taxpayer money, and we’re responsible for it, and we need to protect it. These types of investments are way too risky.”
Bitcoin Hype Dying Down
The decisions in South Dakota and Montana reflect a broader trend of caution among state legislatures regarding the adoption of cryptocurrencies in public investment portfolios, despite the promises of President Donald Trump to create a Strategic Bitcoin Reserve. While some states have shown interest in exploring digital asset investments, concerns about market volatility and regulatory clarity continue to impede widespread acceptance.
As the regulatory landscape evolves and more data becomes available on the performance and stability of cryptocurrencies, state governments may revisit such proposals with a more informed perspective. For now, the rejection of these bills underscores the need for comprehensive discussions and analyses before integrating volatile assets like Bitcoin into public funds.
