U.S. States Reject Bitcoin Reserve Proposals Amid Volatility Concerns

Montana, North Dakota, South Dakota, and Wyoming recently rejected proposals to establish state-level Bitcoin reserves, raising questions about the viability of cryptocurrencies in public finance.
According to reports from CCN and other sources, these legislative defeats reflect growing concerns over Bitcoin’s volatility and the risks associated with investing taxpayer funds in digital assets.
Montana’s House Bill 429 proposed allocating up to R$300 million ($50 million) to Bitcoin, stablecoins, and precious metals. Despite arguments from Representative Curtis Schomer that the plan could diversify investments and protect against inflation, the bill failed.
It was rejected in a 59-41 vote on February 21. Critics, including Representative Steven Kelly, labeled the proposal speculative and risky, emphasizing the need to safeguard taxpayer money.
South Dakota’s HB 1202 faced a similar fate. The bill aimed to invest 10% of state funds in Bitcoin but was rejected by a legislative committee in a 9-3 vote on February 24.
State Investment Officer Matt Clark warned against Bitcoin’s price unpredictability. Meanwhile, proponents argued that the asset could help preserve value during inflationary periods.
State-Level Bitcoin Initiatives Face Setbacks Amid Volatility
North Dakota’s HB 1184 sought to explore a Bitcoin reserve but lost in a 57-32 vote. Even Wyoming, home to crypto advocate Senator Cynthia Lummis, saw its proposal for state-level Bitcoin investments rejected earlier this month by a 7-2 margin in committee.
These setbacks occur as Bitcoin remains volatile, with its price dropping about 20% from its peak of R$654,000 ($109,000) earlier this year. Lawmakers opposing the bills cited Bitcoin’s volatility as a primary concern.
In contrast, proponents highlighted its historical performance as a high-return asset. Despite these failures, some states are advancing similar initiatives. Utah’s Blockchain and Digital Innovation Amendments bill passed a key committee vote on January 28.
The bill allows up to 5% of public funds to be invested in digital assets like Bitcoin. Arizona’s Senate Finance Committee approved SB 1025 on January 27, permitting up to 10% of public funds for Bitcoin investments.
At the federal level, President Donald Trump has fueled discussions by signing an executive order in January directing a study on creating a national digital asset reserve.
However, no concrete federal measures have emerged yet. These mixed outcomes highlight the tension between innovation and fiscal caution. As states evaluate whether cryptocurrencies can play a strategic role in public finance, the debate continues.