Candidates held varying views on crypto, even though the fund’s 410,596 shares in Strategy, which are valued at $166M, offer substantial Bitcoin exposure.
Mixed reactions from potential board members regarding crypto investments were noted by the California state pension fund CalPERS during Wednesday’s forum, even though the system holds shares in the Bitcoin treasury company Strategy, formerly known as MicroStrategy.
The six candidates competing for roles on the California Public Employees’ Retirement System Board of Administration shared differing perspectives when asked whether Bitcoin should be included in the $506 billion fund’s portfolio.
As per its Q2 13F filing, CalPERS possesses 410,596 Strategy shares, which are valued at $165.9 million. This provides the pension system with considerable indirect Bitcoin exposure via the company.
The forum began with a heated exchange as challenger Dominick Bei was assailed by incumbent David Miller during his opening statements. Miller proclaimed that “cryptocurrency should not have a seat on our board and never should,” while referencing Bei’s Bitcoin education nonprofit, Proof of Workforce.
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“Shares in the world’s largest Bitcoin holding company, MicroStrategy, are owned by CalPERS,” Bei countered, challenging why the fund maintains such substantial indirect exposure while candidates oppose direct investment.
Michael Saylor’s Strategy possesses over 636,505 BTC, which is valued at more than $70 billion. This makes it a sought-after avenue for institutional crypto exposure, eliminating the need for direct purchases.
Miller Clarifies Distinction Between Bitcoin Business Investment and Direct Bitcoin Holdings
The seeming inconsistency was explained away by Miller, who clarified that “investing in a business that’s working with Bitcoin transactions is a very different game than direct investment in buying Bitcoin.”
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It was stated by Kadan Stadelmann, the Chief Technology Officer at Komodo Platform, in an interview with that Bitcoin is certainly not too unstable for pensions, especially given the effects of inflation. The market, he added, has “clearly chosen Bitcoin as a store of value.”
He observed that CalPERS is “basically too apprehensive to invest directly in Bitcoin.” He also claimed that the pension fund “has an obligation to ensure Bitcoin is held in self-custody, so the public genuinely holds the assets and not promises from middlemen.”
“Hell no!” was exclaimed by challenger Steve Mermell in response to a query on the role of crypto within CalPERS.
A parallel was drawn by him between crypto and past financial disasters such as the Orange County bankruptcy and Enron. He labeled it “opaque,” asserting that “it has no place in a pension system.”
A more balanced position was adopted by challenger Troy Johnson, who acknowledged concerns while remaining receptive to future evaluation.
He stated he is “very wary of hyper-sensitive investments like crypto,” but added that the door would not be closed on it entirely.
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The divergence among candidates was also evident in how blockchain technology was perceived as opposed to direct crypto investment.
Incumbent Jose Luis Pacheco dismissed the prospect of Bitcoin for investment purposes while describing blockchain as “an emerging technology with promise.” He suggested this opportunity should be studied by CalPERS through partnerships and research.
Meanwhile, a rise in cryptocurrency exposure has been seen among other state pension funds. Michigan’s state pension, for instance, tripled its Bitcoin ETF holdings to $11.4 million in Q2, while the Wisconsin Investment Board maintains a position of over $387 million in Bitcoin ETF shares, and Florida’s retirement system possesses 240,026 Strategy shares valued at $97 million.
It will be determined by the November election whether CalPERS persists with its existing method of indirect crypto exposure or potentially initiates discussions about direct digital asset investment.
