On Monday, South Dakota legislators struck another setback for Bitcoin supporters when they voted to eliminate a proposal that would have permitted the state to invest in Bitcoin.
In a significant development, the House Commerce and Energy Committee made a decision with a 9-3 vote to postpone HB1202 until the 41st day of the session, a procedural choice that effectively doomed the bill, as the session is set to end in no more than 40 days.
This decision mirrors a similar situation in Montana, where legislators defeated a Bitcoin reserve proposal with a 41-59 vote last week.
The legislation, introduced by State Representative Logan Manhart (R-S.D.), aimed to allow the state to invest up to 10% of its public funds in Bitcoin as a means of diversifying its financial portfolio.
“This is a practical update to South Dakota’s investment strategy by permitting a modest allocation of state funds into alternative assets known for maintaining value, especially in inflationary times,” Manhart stated, as reported by South Dakota Public Broadcasting .
Matt Clark, South Dakota’s State Investment Officer, expressed reservations about Bitcoin’s price fluctuations and absence of inherent value.
“Bitcoin lacks any underlying physical application,” Clark noted. “It does not produce income, unlike commodities or various other assets.”
Clark added that while Bitcoin might eventually find a place in state investments, the prevailing market volatility makes it premature to change the law, warning that passing the bill could lead to further misunderstandings.
Manhart countered this viewpoint, asserting that due to Bitcoin’s capped supply and decentralized character, it is a significant asset that warrants the state’s consideration.
Despite this setback, Manhart is committed to reviving the proposal, vowing on X, “We will return next year.”
While states like North Dakota, Wyoming, and Pennsylvania have similarly delayed Bitcoin reserve initiatives, the drive for such proposals remains alive.
Several additional states, including Florida, Arizona, Utah, and Texas are advancing their own proposals, with around 18 state-level Bitcoin reserve initiatives still awaiting decision, as highlighted by Bitcoin Reserve Tracker.
At the same time, Bitcoin and other cryptocurrencies experienced declines on Monday amid new trade concerns and a significant fall in technology stocks, contributing to a broader risk-averse sentiment in global markets.
According to CoinGecko data, the leading cryptocurrency dropped by 3.9% on the day, falling to $91,980.
Edited by Sebastian Sinclair
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