Bitcoin ETFs Could Be Added to State Retirement Portfolios in Arizona


A bill before the Arizona state senate would encourage the state’s portfolio of retirement plans for government workers to include Bitcoin ETFs. Adoption of the digital asset is proposed in Senate Concurrent Resolution 1016, introduced by state Sens. Jake Hoffman and Warren Petersen along with Rep. Joseph Chaplik.

The non-binding resolution highlights the explosive market interest in Bitcoin and Bitcoin ETFs following the approval of 11 spot Bitcoin ETFs in January, noting that the top cryptocurrency has a market cap of over $1.3 trillion and that global assets under management for firms that have filed for a Bitcoin ETF add up to more than $16 trillion.

The state has pension plans that already include other high-value assets like gold and silver in the form of ETFs, the resolution states.

“The federal government holds approximately 200,000 Bitcoin; and Arizona's state retirement systems have an obligation to meet the best interests of their members.”

While the proposed legislation focuses on Bitcoin, the document left the door open for other digital asset-based ETFs, like the highly anticipated Ethereum ETFs being considered by the U.S. Securities and Exchange Commission.

“It is important that the Arizona State Retirement System and the Public Safety Personnel Retirement System work with the State Treasurer's office to evaluate the potential risks and benefits of investing in Bitcoin and digital asset ETFs, given the evolving regulatory landscape and growing market capitalization,” the resolution explains.

In evaluating Bitcoin and digital asset ETFs, the backers of the resolution urged the state retirement systems to look at the feasibility, risks, and benefits of digital asset investments, and asked for recommendations to be submitted to key state officials.

The authors of the resolution did not respond to a request for comment from Decrypt.

The benefits of including Bitcoin exposure to pension plans have been separately advocated by entrepreneur and investor Anthony Pompliano, who issued a call to do so over four years ago.

“In December 2018, I wrote to this group in a letter titled ‘Every Pension Fund Should Buy Bitcoin’ with an explanation on why every public pension fund should purchase Bitcoin,” Pompliano wrote on Twitter, pointing to excerpts from the letter. “ I continued in the same letter and explained that the pension funds only needed to put 1% of their assets into Bitcoin to have a material impact.”

Government pension funds nationwide are struggling to meet their obligations to retirees. According to Pompliano, if every state pension fund had bought 1% exposure to Bitcoin in 2018, there would be 14 fully funded state pension funds instead of just four.

“We can’t change what has already happened, so we have to look forward,” Pompliano continued. “There are many people who will argue that pension funds shouldn’t buy Bitcoin today because the returns have already been captured. I disagree with this thought process.”

Source : Decrypt by Jason Nelson / Mar 7, 2024 logo


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