A renewed push for Bitcoin investment in South Dakota’s state funds has emerged this week as Representative Logan Manhart introduced House Bill 1155. This proposal aims to allow the state to invest up to 10% of its investment funds in Bitcoin, either through direct holdings or via exchange-traded products. This attempt comes approximately one year after a similar proposal faced defeat in February last year.
Manhart expressed his enthusiasm on social media, declaring, “Strong money. Strong state.” His advocacy for cryptocurrency aligns with a growing trend among state lawmakers—nearly 30 states have attempted to introduce Bitcoin-related legislation. However, the majority of these initiatives have fallen short, with many being halted at the initial committee review stage.
The motivation behind this latest endeavor can be traced back to concerns over the performance of South Dakota’s investment funds, which are utilized to support critical services such as education, healthcare, and retirement systems. The South Dakota Investment Council reported managing $20.56 billion in assets but yielded a return of only 5.5% last year, significantly below its benchmark of 12.5%.
Currently, a large portion of the state’s investment portfolio is assigned to public equities, with smaller allocations in real estate and debt. The underperformance has prompted calls for innovative strategies, including the potential inclusion of Bitcoin, which proponents argue could provide higher returns.
The national landscape features a growing interest in cryptocurrency, spurred in part by high-profile endorsements from figures like former President Donald Trump. This has led to traction in various states, where pro-Trump lawmakers are often at the forefront of crypto reserve proposals. According to data from Bitcoin Laws, 28 states have considered crypto reserve legislation to date, but most encounters with legislative committees have resulted in failure.
Manhart’s initial proposal last January drew attention on social media, where he tagged influential personalities like Trump and Elon Musk. However, it met a similar fate to his current bill, as it was deferred for consideration after the legislative session ended.
As it stands, only three states—Arizona, New Hampshire, and Texas—have adopted Bitcoin reserve legislation, though implementation varies. Arizona’s efforts to create a comprehensive strategic reserve have faced roadblocks, with only a reserve for seized assets approved. New Hampshire permits investments up to 5% of funds in digital assets with a significant market cap, which currently only includes Bitcoin, although it is unclear if any acquisitions have been made. Texas allows a 5% investment and has only executed a modest $5 million purchase thus far.
In the realm of advancing crypto legislation, Arizona has recently seen movement, with its Senate Financial Committee voting to advance a bill exempting virtual currency from property taxes. Kansas has also entered the fray by introducing its own strategic reserve proposal.
As legislative sessions progress, the future of Bitcoin investment within state funds remains uncertain, but advocates like Manhart are hopeful that enhanced acceptance of cryptocurrency could lead to larger financial returns on public investments.
