Emily Walker
Florida’s state pension fund has decided to innovate by aligning with the vision of President-elect Donald Trump, planning to create a Bitcoin reserve.
Officials have confirmed that the pension fund will channel $1.85 billion from member contributions into Bitcoin to enhance investment diversity.
Investing in Bitcoin
The Florida Blockchain Business Association (FBBA) has revealed that $1.85 billion from the state’s pension fund is earmarked for Bitcoin investments, a decision supported by the state’s leadership.
FBBA president Samuel Armes stated that Florida is set to initiate a “strategic Bitcoin reserve” and expressed optimism about establishing this reserve in the upcoming first quarter of next year.
Armes emphasized that the backing from influential pro-Bitcoin politicians, such as House Speaker Danny Perez and Governor Ron DeSantis, enhances the chances of this investment. According to him, Perez is well-versed in the technology, while DeSantis stands out as one of the most supportive governors for Bitcoin in the U.S.
Florida is going to launch a strategic Bitcoin reserve, and here’s how we’re going to do it
Florida has a very good chance of creating a strategic Bitcoin reserve this session, which starts in Q1 of 2025.
Here’s what you need to know:
The Speaker of the Florida House, Danny… pic.twitter.com/JJRNU1V7ZI
— Samuel Armes (@samuelarmes) December 3, 2024
Pension Fund Embraces Cryptocurrency
Armes proposed that one effective method to build Florida’s Bitcoin reserve is to permit the state pension fund to allocate $1.85 billion into Bitcoin.
“Utilize our $185.7B pension fund to invest a small proportion in Bitcoin as a hedge against inflation,” stated Armes.
He clarified that Florida’s pension fund has a history of investing in digital assets, having already engaged in Bitcoin and related crypto investments.
As the fourth largest pension fund in the U.S., Florida can allocate 1% of its assets to establish a Bitcoin reserve, which would support diversification and provide exposure to the expanding cryptocurrency landscape.
“The pension fund invests in hedge funds, which have acquired shares in the Bitcoin industry (such as miners, MSTR, Coinbase) while also purchasing liquid tokens,” he added.
$800 Million in Crypto Investments
Florida’s existing engagement in digital assets includes approximately $800 million invested in cryptocurrencies.
Chief Financial Officer Jimmy Patronis encouraged other pension funds to embrace Bitcoin as part of their investment strategies, advocating for its inclusion in state portfolios.
“Cryptocurrency is here to stay. Its expansion is inevitable, and we would be remiss not to capitalize on its potential,” said Patronis, underscoring the necessity for readiness in the face of digital currency growth.
However, some analysts have raised alarms regarding the volatility associated with the state’s plans to invest in Bitcoin.
Charles Bobrinskoy from Ariel Investments described Bitcoin as a “momentum-driven bubble,” highlighting its unpredictable pricing and lack of intrinsic value.
In contrast, state officials remain steadfast in their belief that Bitcoin represents a prudent long-term investment, offering a more reliable alternative for mitigating conventional financial risks.
Featured image from Business Standard, chart from TradingView