South Dakota Republican Representative Logan Manhart introduced House Bill 1155 Tuesday to allow the state to invest up to 10% of public funds in Bitcoin (CRYPTO: BTC)—one year after the legislature killed the identical bill over “volatility concerns.”
What’s In The Bill
The bill allows South Dakota’s State Investment Council to invest up to 10% of eligible state funds in Bitcoin.
The state can choose from three options: hold Bitcoin directly with exclusive state control, use qualified custodians like regulated banks, or buy regulated Bitcoin ETFs.
The legislation includes strict security requirements.
The state must control its own private keys, store them in encrypted hardware across multiple secure locations, require multiple people to approve transactions, and conduct regular security audits.
House Bill 1155 now moves to the Committee on Commerce and Energy, which is the same committee that killed the identical proposal last year.
Why It Failed Last Year
The identical House Bill 1202 was introduced in January 2025 but got deferred to the legislature’s 41st day, effectively killing it since South Dakota’s session only lasts 40 days.
Manhart said the bill was rejected over “concerns of volatility.”
South Dakota’s State Investment Officer Matt Clark argued that Bitcoin lacks underlying physical use and doesn’t generate income like other assets.
That was February 2025, when Bitcoin was trading around $89,500. Today, Bitcoin trades around $89,900.
The 10% Allocation Question
Allowing up to 10% of state funds in Bitcoin is aggressive compared to traditional portfolio theory, but conservative compared to corporate treasury strategies.
Strategy Inc. (NASDAQ:MSTR) holds over 712,000 BTC representing the majority of its treasury. But these are private companies, not state governments managing taxpayer funds.
The 10% cap provides guardrails while allowing meaningful exposure.
If Bitcoin rallies significantly, that allocation could provide substantial returns. If it crashes, the state only loses up to 10% of invested funds.
What Happens Next
Manhart wrote on X: “I am proud to say I have released my bill that would allow the State of South Dakota to invest in Bitcoin. Strong money. Strong state.”
Bitcoin volatility has decreased significantly compared to early cycles, and institutional adoption has accelerated.
But state investment officers like Clark remain skeptical about assets that don’t generate cash flow.
For Bitcoin holders, state adoption matters because it signals institutional legitimacy and creates steady buying pressure.
But the impact is symbolic unless multiple large states follow—South Dakota’s public funds are minimal compared to Bitcoin’s $1.8 trillion market cap.
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