California's Pension Fund Debates Investment in Bitcoin
The California Public Employees' Retirement System (CalPERS) recently held a forum, where six candidates vying for seats on the Board of Administration expressed divided views on whether Bitcoin should be included in the $506 billion fund's portfolio.
Incumbent David Miller opened the forum with a jab at challenger Dominick Bei, referencing Bei's Bitcoin education nonprofit, Proof of Workforce. Miller questioned the suitability of such investments for the pension system. However, the apparent contradiction was addressed by Miller later in the discussion, stating that investing in a business that works with Bitcoin transactions is different from direct investment in buying Bitcoin.
Bei, on the other hand, advocated for exploring Bitcoin directly, contrasting with Miller's opposition to direct Bitcoin inclusion. He questioned why CalPERS maintains substantial indirect Bitcoin exposure via shares in MicroStrategy, a Bitcoin storage company, while candidates oppose direct investment.
Jose Luis Pacheco, another incumbent, rejected the possibility of Bitcoin as an investment but called blockchain "an emerging technology with promise." He suggested CalPERS should study this opportunity through partnerships and research.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, argued that Bitcoin is not too volatile for pensions, especially in light of inflation. He stated that the market has "clearly chosen Bitcoin as a store of value."
Troy Johnson, another challenger, adopted a more nuanced stance. He expressed wariness about cryptocurrency investments but remained open to future consideration, stating he is "very wary of hyper-sensitive investments like crypto" but would not "close the door entirely on it."
The forum concluded with Michigan's state pension tripling its Bitcoin ETF holdings to $11.4 million in Q2, and Florida's retirement system maintaining 240,026 MicroStrategy shares worth $97 million. Wisconsin's Investment Board also holds over $387 million in Bitcoin ETF shares.
The November election will determine whether CalPERS continues its current approach of indirect crypto exposure or potentially opens discussions about direct digital asset investment. The split among candidates on this issue extends beyond their views on Bitcoin; it also reflects their views on blockchain technology as a whole.
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