South Dakota bill would let State Investment Council invest up to 10% of funds in Bitcoin
South Dakota Rep. Logan Manhart reintroduced House Bill 1155 on Jan. 27, 2026, proposing that the State Investment Council may allocate up to 10% of state-managed public funds into Bitcoin (BTC). The bill is largely a refile of a similar 2025 proposal that stalled and would permit exposure via direct Bitcoin holdings or regulated exchange-traded products (ETPs). Direct custody would require qualified custodians—federally or state-chartered banks or trust companies—while ETPs must be approved by U.S. regulators such as the SEC, CFTC or South Dakota’s Division of Banking. Based on prior estimates of the state’s investment pool (~$16–17 billion), a full 10% allocation could imply multi‑billion-dollar Bitcoin exposure. Manhart frames Bitcoin as a hedge against inflation and long-term currency risk. The measure remains in an early legislative stage and faces recurring objections raised during the 2025 effort—volatility, valuation complexity and regulatory uncertainty—with state officials previously expressing reservations. If enacted, South Dakota would join a small group of U.S. states that have allowed limited Bitcoin exposure under custody and regulatory safeguards. For traders: the bill represents potential incremental institutional demand for BTC if passed, but timing, scope (direct holdings vs. ETPs) and legal/regulatory hurdles make any immediate price impact uncertain.
Bullish
A state-authorized pathway for allocating up to 10% of a public investment pool into Bitcoin increases potential institutional demand for BTC, which is bullish for price over time. The bill explicitly allows direct holdings (with qualified custodians) or regulated ETPs, both of which are established mechanisms for institutional exposure. Based on the cited $16–17 billion estimate for the state pool, a full 10% allocation would represent multi‑billion-dollar demand—material relative to typical weekly on-chain and ETF inflows—if actually deployed. However, the impact is tempered by several practical limits: the bill is in early legislative stages and may not pass; even if enacted, implementation could be slow due to custody arrangements, regulatory approvals and internal objections; and ETP routes may dilute immediate spot demand compared with direct purchases. Therefore expect limited near-term price moves tied to political developments or statements, and more pronounced bullish effects should the bill pass and trigger concrete buying or ETP allocations. Traders should watch legislative progress, custody/ETP language, and any procurement timelines to time entries around potential institutional flows.