House committee rejects Bitcoin bill over market uncertainty concerns

A House committee rejected a bill permitting the state to invest in bitcoin.

Opponents said the House Commerce and Energy Committee meeting Monday a large reason for rejecting it is Bitcoin’s “volatile” market.

Aberdeen Republican Rep. Logan Manhart is the bill’s prime sponsor. He said the bill allows the state to tap into a market that can withstand inflation, unlike the U.S. dollar.

“It’s a commonsense update to South Dakota’s investment strategy by allowing a limited allocation of state funds into alternative assets that have consistently proven to preserve value, particularly in inflationary environments,” Manhart said. 

Opponents disagreed, saying the Bitcoin market can be uncertain.

Matt Clark is the State Investment Officer. His department manages the state’s cash flow fund and other funds for South Dakota. He said he has concerns if the state were to invest in Bitcoin.

“We do view Bitcoin as a volatile, speculative asset. Regardless, Bitcoin does not generate any income much like commodities or other kinds of assets, perhaps collectibles or other things, rare coins, etc.," Clark said. "Bitcoin does not have any underlying physical use though. But it does have the advantage of anonymity for those who need that. It also means, if it’s anonymous, if it’s stolen you will not be able to recover it since it is untraceable." 

Clark said down the road if Bitcoin becomes more proven, then it makes sense to change the law. However, he said currently it is too early, and the bill would only result in confusion.

Manhart disagreed, saying Bitcoin at its core is an asset the state could take advantage of.

“It has been described as digital gold as we’ve heard about it. It is not a Ponzi scheme. Bitcoin itself is a decentralized, fixed supply asset. Excluding Bitcoin due to many of the concerns you’ve heard I believe you’re missing out,” Manhart said. 

The bill died in the House Commerce and Energy Committee 9-3. Despite this, Manhart said the fight isn’t over. On X he said he “Will be back next year.”