Key Takeaways
- Florida’s Chief Financial Officer proposes Bitcoin as a diversification asset to safeguard state pension funds against market volatility.
- A pilot program could allocate up to 1.5% of the Florida Retirement System trust fund to Bitcoin investments.
- Florida would join other states like Wisconsin and Michigan, which have introduced Bitcoin in their pension fund strategies.
Florida Considers Adding Bitcoin to Pension Fund Portfolio
Florida's Chief Financial Officer, Jimmy Patronis, has proposed adding bitcoin as a diversification asset for state pension funds.
In a letter to Chris Spencer, head of the Florida State Board of Administration (SBA), Patronis suggested exploring Bitcoin investments as a potential hedge against market volatility.
This proposal aims to enhance the security of pension fund investments by diversifying into Bitcoin.
Pilot Program Could Open New Avenues for Retirement Fund Investments
Patronis has proposed a 'Digital Currency Investment Pilot Program' under the Florida Growth Fund, allowing limited Bitcoin exposure.
The pilot program could allocate up to 1.5% of the Florida Retirement System trust fund, valued at over $205B, to bitcoin.
Patronis highlighted that bitcoin's unique qualities could protect against volatility found in other assets, making it a useful addition to the portfolio.
The pilot aligns with Florida Governor Ron DeSantis’s stance against Central Bank Digital Currencies (CBDCs).
State Seeks Feasibility Report and Considers Approaches from Other Regions
Patronis requested that the SBA complete a comprehensive feasibility report on Bitcoin investments by March 2025, covering risks and potential benefits.
This report would guide legislators in deciding whether to formally integrate Bitcoin into Florida’s pension fund strategy.
If implemented, Florida’s approach would resemble actions taken by states like Wisconsin and Michigan, which have already begun investing in Bitcoin-related assets.
For instance, Wisconsin invested $163M in Bitcoin ETFs, while Michigan holds shares in ARK's 21Shares ETF, reflecting a growing interest in Bitcoin among state pension funds.
