A bill before the Arizona State Senate would encourage public employees to include Bitcoin ETFs in the state's retirement portfolio. Approving the digital asset was introduced by Senate Concurrent Resolution 1016, introduced by State Sens. Jake Hoffman and Warren Peterson, along with Representative Joseph Chaplik.
The non-binding recommendation highlights exploding market interest in Bitcoin and Bitcoin ETFs following the approval of the 11-spot Bitcoin ETF in January, noting that the top cryptocurrency has a market cap of more than $1.3 trillion and is managing global assets for companies. Adds more than $16 trillion to Bitcoin ETF
The state also has pension schemes that invest in other high-value assets like gold and silver in the form of ETFs, the resolution said.
“The federal government holds approximately 200,000 Bitcoins; and Arizona's state pension systems are obligated to meet the needs of their members.”
While the proposed legislation focuses on Bitcoin, the document leaves the door open for other digital asset-based ETFs, such as the highly anticipated Ethereum ETFs proposed by the US Securities and Exchange Commission.
“It is important that the Arizona State Retirement System and Public Safety Employees Retirement System work with the State Treasurer's Office to evaluate the potential risks and benefits of investing in Bitcoin and digital asset ETFs in light of the evolving regulatory landscape and growing market capitalization,” the decision explains.
In reviewing bitcoin and digital asset EFAs, proponents of the resolution urged state pension systems to consider the feasibility, risks and benefits of digital asset investments and called for recommendations to be submitted to key state officials.
The resolution's authors did not respond to a request for comment from Decrypt.
The benefits of including exposure to Bitcoin for pension plans have been argued separately by entrepreneur and investor Anthony Pompliano, who called for doing so four years ago.
“In December 2018, I wrote a letter to this group entitled ‘Every Pension Fund Should Buy Bitcoin,' explaining why every public pension fund should buy Bitcoin,” Pompiano tweeted, pointing to an excerpt from the letter. “I continued in the same letter and explained that pension funds only need to put 1% of their assets into Bitcoin for a material impact.”
Nationally, state pension funds are struggling to meet their obligations to retirees. According to Pompliano, if every state pension fund bought a 1% exposure to Bitcoin in 2018, there would be 14 fully funded state pension funds instead of just four.
“We cannot change what has happened, so we have to look forward,” Pompliano continued. “There are a lot of people who argue that pension funds shouldn't buy Bitcoin today because the returns have already been captured. I disagree with that thought process.
Edited by Ryan Ozawa.
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