California’s Public Employees’ Retirement System (CalPERS) recently hosted a forum featuring candidates vying for positions on its Board of Administration, where discussions on cryptocurrency investments revealed stark divisions in opinion. Despite CalPERS holding substantial shares in MicroStrategy—specifically 410,596 shares valued at approximately $165.9 million—candidates expressed a range of views about the suitability of cryptocurrencies within the fund’s broad portfolio, which exceeds $506 billion.
The debate intensified when current board member David Miller, during his opening remarks, vocally dismissed any potential for cryptocurrency investments, stating, “cryptocurrency should not have a seat on our board and never should.” This comment came in response to challenger Dominick Bei, who operates a Bitcoin education nonprofit and questioned the logic behind maintaining indirect exposure to Bitcoin through MicroStrategy while actively opposing direct investments.
MicroStrategy, led by CEO Michael Saylor, is recognized as one of the largest holders of Bitcoin, with over 636,505 BTC valued at more than $70 billion. Miller attempted to clarify this apparent contradiction by arguing that investing in a business engaged with Bitcoin transactions differs significantly from direct Bitcoin purchases.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, commented on the discussion, suggesting that Bitcoin’s volatility should not deter pension funds, especially when considering its emerging status as a store of value amid inflation. Stadelmann criticized CalPERS for its reluctance to invest directly in Bitcoin, asserting that the fund has a responsibility to secure real assets rather than depend on intermediaries.
In sharp contrast, candidate Steve Mermell expressed strong opposition to cryptocurrency, asserting a “Hell no!” response when asked about its relevance to CalPERS. He likened cryptocurrencies to previous financial calamities, such as the Orange County bankruptcy and the Enron scandal, calling the asset class “opaque” and unsuitable for a pension system.
Challenger Troy Johnson adopted a more cautious approach, voicing concerns about the volatility of cryptocurrencies but remaining open to considering them in the future. “I’m very wary of hyper-sensitive investments like crypto,” he said, yet he noted he would not “close the door entirely on it.”
Opinions also varied regarding the potential of blockchain technology. While incumbent Jose Luis Pacheco rejected Bitcoin as an investment option, he acknowledged blockchain’s potential, suggesting that CalPERS explore this opportunity through academic partnerships and research initiatives.
Meanwhile, other state pension funds across the country have been increasing their exposure to cryptocurrencies. For instance, Michigan’s state pension reportedly tripled its holdings in Bitcoin ETFs to $11.4 million during the second quarter, Wisconsin’s Investment Board holds over $387 million in Bitcoin ETFs, and Florida’s retirement system maintains 240,026 shares in MicroStrategy worth around $97 million.
As the November election approaches, the outcome could determine whether CalPERS will continue its strategy of indirect cryptocurrency exposure or engage in discussions regarding direct investments in digital assets.
