TLDRSouth Dakota lawmakers voted 9-3 to defer House Bill 1202, effectively killing the Bitcoin reserve proposal for this sessionThe bill would have allowed the state to invest up to 10% of public funds in BitcoinState Investment Officer Matt Clark cited concerns about Bitcoin’s volatility and lack of intrinsic valueRepresentative Logan Manhart plans to reintroduce the bill next yearBitcoin prices dropped 3.9% on Monday to $91,980 amid broader market concernsSouth Dakota lawmakers have blocked a bill that would have allowed the state to invest in Bitcoin, adding to a growing trend of states rejecting such proposals. The House Commerce and Energy Committee voted 9-3 on Monday to defer House Bill 1202 until the 41st day of the session, a procedural move that effectively killed the legislation since the session concludes in no more than 40 days.The bill, introduced by State Representative Logan Manhart (R-S.D.), sought to permit South Dakota to allocate up to 10% of its public funds into Bitcoin investments. Manhart had promoted the bill as a “commonsense update” to the state’s investment strategy that would allow for “a limited allocation of state funds into alternative assets that have consistently proven to preserve value, particularly in inflationary environments.”This decision comes just days after Montana lawmakers rejected a similar Bitcoin reserve bill in a 41-59 vote. The Montana proposal, House Bill 429 introduced by Representative Curtis Schomer, had aimed to create a special revenue account allowing up to $50 million to be allocated for cryptocurrencies, stablecoins, and precious metals.Matt Clark, South Dakota’s State Investment Officer, was among those who opposed the bill, raising concerns about Bitcoin’s volatility and lack of underlying value. “Bitcoin does not have any underlying physical use,” Clark stated during discussions. “It does not generate income, much like commodities or other kinds of assets.”Clark further explained that while Bitcoin might eventually be integrated into state investments, current market uncertainties make it too early to amend the law. He suggested that passing the bill now would only lead to more confusion rather than benefit the state’s financial portfolio.Representative Manhart disagreed with this assessment, arguing that Bitcoin’s fixed supply and decentralized nature make it a valuable asset that the state should consider adding to its investments. Despite the setback, Manhart remains committed to the idea, pledging on social media platform X, “We will be back next year.”My bill to allow South Dakota to invest in Bitcoin died 9-3 in committee this morning.We will be back next year.— Logan Manhart (@ManhartLogan) February 24, 2025States Divided on Crypto InvestmentThe primary concerns cited by lawmakers who opposed the bill included Bitcoin’s price volatility and the lack of clear federal regulations. Some legislators expressed hesitation about approving the allocation of taxpayer money toward a digital asset with such unpredictable price movements.The uncertainty surrounding cryptocurrency regulations at both state and federal levels also played a role in the bill’s rejection. With the legal landscape for Bitcoin reserves still evolving, lawmakers expressed caution about moving forward without clearer guidelines.South Dakota and Montana are not alone in their hesitation to embrace Bitcoin as a state investment. Similar proposals have stalled in North Dakota, Wyoming, and Pennsylvania, reflecting widespread concern among state legislatures about the risks associated with cryptocurrency investments.However, the momentum for such initiatives continues in other states. According to the Bitcoin Reserve Tracker, approximately 18 state-level Bitcoin reserve proposals are still pending across the country. States including Florida, Arizona, Utah, Texas, and Missouri are pushing forward with their own bills, indicating ongoing interest in integrating digital assets into public investment strategies.The rejection of the South Dakota bill coincided with a broader market downturn for cryptocurrencies. On Monday, Bitcoin fell 3.9%, dropping to $91,980 according to data from CoinGecko. This decline happened amid fresh trade concerns and a steep drop in technology stocks, contributing to a general risk-off atmosphere across global markets.Bitcoin Price on CoinGeckoThe market context may have added to lawmakers’ concerns about Bitcoin’s stability as a potential investment for public funds. With the cryptocurrency’s price showing continued volatility, arguments about its suitability for state reserves face additional scrutiny.For advocates of state Bitcoin reserves, the South Dakota and Montana rejections represent temporary setbacks rather than a final verdict on the concept. The growing number of states considering similar legislation suggests that the debate over public fund investments in cryptocurrency will continue.Representative Manhart’s determination to reintroduce the bill next year highlights the persistent interest in exploring Bitcoin as a potential component of state investment portfolios. As the regulatory landscape evolves and more data becomes available on Bitcoin’s long-term performance, future proposals may address the concerns that led to the current bill’s rejection.While the South Dakota bill has been deferred for this legislative session, the broader conversation about cryptocurrency’s role in public finance continues to develop across the United States. As more states consider similar proposals, the outcomes of these legislative efforts will help shape the future relationship between government funds and digital assets.Meanwhile, institutional interest in Bitcoin continues to grow in the private sector. MicroStrategy, now rebranded as Strategy, has expanded its Bitcoin holdings to nearly 500,000 BTC after its latest $2 billion purchase, demonstrating ongoing corporate confidence in the cryptocurrency despite its volatility.As states like South Dakota weigh the risks and benefits of Bitcoin investments, the contrast between cautious government approaches and bold corporate strategies highlights the evolving and complex nature of cryptocurrency adoption across different sectors of the economy.For now, South Dakota has joined Montana in putting Bitcoin reserve plans on hold, but the door remains open for future consideration as the cryptocurrency market matures and regulatory frameworks become more established.The post Two States Reject Bitcoin Reserve Bills as Others Continue to Consider Options appeared first on Blockonomi.