- Bitcoin ETFs’ record-breaking performance has caught the eye of traditional finance.
- The Arizona Senate is considering investing in Bitcoin.
- Over the following weeks, retirement systems could assess Bitcoin’s viability as an investment.
2024 is shaping up to be a promising year for the crypto market, especially Bitcoin. In the first quarter alone, the digital asset has seen many positive developments, including tapping its previous all-time high and reeling in billions through institutional ETFs.
Given Bitcoin’s recent rise to prominence among investment giants, it’s proving to be a sound investment option, even catching the attention of states like Arizona, which are now considering gaining exposure following its meteoric rise.
Arizona Considers Bitcoin Pensions
The Arizona state Senate recently pushed a resolution that would have lawmakers and state retirement fund managers consider digital assets, specifically Bitcoin ETFs, as potential investments for the state’s retirement systems.
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The concurrent resolution, introduced less than a month after the US SEC approved Bitcoin ETFs, aims to encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to examine the feasibility of including digital asset ETFs, like Bitcoin ETFs, in their portfolios.
The ASRS and the PSPRS serve as the backbone of the retirement benefits for Arizona’s public employees, collectively holding over $70.2 billion in assets under management as of 2024.
The state Senate passed the resolution in a close 16-13 vote last month. The vote largely split along party lines, with all Democrats voting against it. The text will undergo review by the state House Ways and Means Committee.
What Happens If Arizona’s Crypto Pension Resolution Passes?
As a concurrent resolution, the proposal can move forward with support from the House and the Senate, bypassing a signature from Arizona Governor Katie Hobbs. However, it will not carry the same force as a law if passed.
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Should Arizona’s crypto pension proposal receive approval, the ASRS and PSPRS will create a “report on the feasibility, risk and potential benefits of directing a portion of state retirement system monies into digital asset ETFs, including a list of options and recommendations for how the state might safely invest in the digital asset class.”
While this is not the first time states have considered adding crypto exposure to pensions and retirement plans, the newly-approved Bitcoin ETFs could provide a more accessible onramp.
Bitcoin ETFs’ Influence
Bitcoin ETFs have sent shockwaves across both traditional and crypto markets since gaining approval earlier this year. Reeling in billions of dollars daily, the investment vehicles have consistently broken records and notably impacted investor sentiments, particularly in traditional finance.
At press time, the total AUM stood at an impressive $47 billion, according to SoSoValue.
On the Flipside
- In 2021, a Houston, TX, firefighter pension fund announced a $25 million investment in Bitcoin and Ether through NYDIG, an investment management firm.
- A CFA Institute survey in April 2022 found that 94% of state and government pension plan sponsors reported investing in crypto.
Why This Matters
Bitcoin is gaining prominence as a solid investment option, evidenced by the Arizona Senate’s recent proposal. The gradual acceptance shown by these organizations could translate into a broader acknowledgment of other crypto assets as viable investments.
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