Florida considers incorporating Bitcoin into retirement funds to provide hedging for investment portfolios
Florida State Treasurer Jimmy Patronis recently suggested that the state government consider including Bitcoin in the investment portfolio of the state retirement fund, in order to provide a hedge against market volatility for the investment portfolio.
Jimmy Patronis wrote to Chris Spencer, Executive Director of the Florida Board of Governors (SBA), on October 29th, proposing to evaluate the feasibility, risks, and potential benefits of investing some state retirement system funds in digital asset classes, and to complete the report before the next legislative session on March 4, 2025. He said:
Bitcoin is known as the 'digital gold', which can help diversify state investment portfolios and provide a stable hedge against volatility in other major asset classes
Currently, the total assets managed by Florida SBA exceed $205 billion, covering over 30 funds including the Florida Retirement System Trust Fund. Patronis suggests that SBA may consider establishing a "Digital Currency Investment Pilot Program" within the Florida Growth Fund, utilizing up to 1.5% of the fund's funds for high growth investments. According to the January report, the growth fund has invested $998 million in high growth projects between 2022 and 2023.
When managing state pensions for firefighters, teachers, and police officers, priority should be given to the best investment return. The potential of investing in cryptocurrencies such as Bitcoin is particularly attractive in this context
He also pointed out that this measure is consistent with Florida Governor Ron DeSantis' recent opposition to central bank digital currencies (CBDCs), believing that cryptocurrency is the "opposite" of central currency and more in line with the state government's investment philosophy.
If Florida adopts this proposal, it will join the ranks of states such as Wisconsin and Michigan that have already included cryptocurrency in their retirement fund investments. In May of this year, the Wisconsin Investment Board (SWIB) disclosed that the state had invested $164 million in Grayscale and BlackRock's Bitcoin spot ETF, accounting for 0.1% of its total assets. A few months later, the Michigan Retirement System also announced its Bitcoin investment, holding 110000 shares of the ARK 21Shares ETF, which represents approximately 0.003% of its assets.
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