Bitcoin’s (BTC) recent price slump has reignited debates about its role in the financial system, with economist Peter Schiff sharply criticizing its volatility. Meanwhile, lawmakers in South Dakota have effectively blocked a bill that would have allowed the state to allocate a portion of its public funds to Bitcoin investments.
Peter Schiff’s Bitcoin Criticism
Peter Schiff, a well-known economist and outspoken Bitcoin critic, took to social media to highlight Bitcoin’s downturn, suggesting that its recent performance undermines the idea of a U.S. Bitcoin reserve. “Bitcoin is now down over 20%, an official bear market,” he wrote on X. Schiff warned that if former President Donald Trump continues to associate with Bitcoin, it could be damaging to his image.
Bitcoin is now down over 20%, an official bear market. So much for a U.S. Strategic Reserve. Establishing one now would look like a Bitcoin Bailout Fund. Trump needs to distance himself from Bitcoin so as not to be associated with its demise. Trump likes winners, not losers.
— Peter Schiff (@PeterSchiff) February 25, 2025
“Trump needs to distance himself from Bitcoin so as not to be associated with its demise. Trump likes winners, not losers,” he added. Schiff’s comments come amid broader discussions about Bitcoin’s future in both state and federal policy. The price drop has raised concerns about whether government efforts to integrate Bitcoin into financial strategies are sustainable.
South Dakota Legislature Kills Bitcoin Investment Bill
In South Dakota, lawmakers have effectively halted a proposal that would have allowed the state to invest in Bitcoin. The bill, known as HB 1202, was introduced by State Representative Logan Manhart on January 30 and sought to amend state regulations to permit up to 10% of public funds to be invested in BTC.
However, during a meeting on February 24, the House Commerce and Energy Committee voted to defer the bill to the 41st day of the legislative session. Since South Dakota’s legislative session lasts only 40 days, this maneuver effectively ended the bill’s chances of passing.
Despite this setback, Manhart remains committed to the idea. He announced on X that he plans to reintroduce the bill in 2026, indicating that the push for Bitcoin investment in South Dakota is far from over.
State-Level Bitcoin Initiatives Face Challenges
South Dakota is not the only state where Bitcoin investment efforts have struggled. Similar proposals have failed in North Dakota, Montana, and Wyoming. Meanwhile, states like Florida, Arizona, Utah, Ohio, Missouri, and Kentucky are still considering legislation that would establish Bitcoin reserves.
The discussions at the state level mirror national conversations about crypto policy. President Trump’s administration has taken a different stance on digital assets compared to his predecessor, President Joe Biden. In a January 23 executive order, Trump proposed forming a working group to explore the feasibility of a national Bitcoin stockpile. However, many of his executive orders have faced legal scrutiny, with opponents arguing they may be unconstitutional.
Additionally, the U.S. Securities and Exchange Commission (SEC) has already signaled a shift in approach by dropping some investigations into crypto firms. Reports indicate that the SEC has even closed its case against Coinbase, a major crypto exchange that had been under scrutiny since 2023.
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