The American State Of Florida Wants Bitcoins!

After Michigan and Wisconsin, a new American State wants to integrate bitcoin into its pension fund: Florida.

Bitcoin for the Golden Years

The launch of Bitcoin ETFs has unlocked a very particular type of investor in the United States: state pension funds.

In May, the investment office of the State of Wisconsin – which manages 156 billion dollars of assets for the Wisconsin retirement system – revealed it had invested 162 million dollars in several Bitcoin ETFs. That is 0.1% of its portfolio.

The fund from the State of Michigan (140 billion $) did the same, but to a lesser extent, with an investment of 6.6 million dollars.

Another State is soon expected to join the dance, and not the least: Florida. Its GDP is greater than that of Spain…

The CFO of the “sunshine state” was on CNBC this Thursday to announce the news. For Jimmy Patronis, “Bitcoin is here to stay. It will continue to appreciate and it would be foolish not to prepare to do everything in our power to take advantage of this opportunity”.

JUST IN: 🇺🇸 Florida's CFO says that if you are not paying attention to Bitcoin, “you are making a mistake.”

“We need to leverage this opportunity. I would like to pay down our debt.” 🙌

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— Bitcoin Magazine (@BitcoinMagazine) October 31, 2024

When asked why the Chinese government remained on the sidelines, Mr. Patronis remarked that “it is a mistake not to pay attention to [bitcoin]”.

Mr. Patronis has also shown hostility towards the CBDC. “We need to be able to protect ourselves from the grasp that a centralized currency (CBDC) would offer to the federal government. I don’t want the federal government to know what I’m buying, where, and when”.

“Bitcoin is digital gold that will participate in the diversification of the Florida State’s portfolio. It will provide a hedge against the volatility of other major asset classes”, he added.

BTC Strategy

The idea of diversifying the portfolio with bitcoin is simple. It’s about finding a balance between the need to provide a guaranteed return to retirees and a prudent risk management.

The typical strategy of a pension fund is to invest mainly in government bonds. Treasury bonds are considered to be the least risky securities available, while providing stable returns.

Shares of large multinationals and their bonds complement pension fund portfolios. These three asset categories have long been the only ones to which pension funds were exposed.

But things have changed since the 2008 financial crisis, which led to a long period of near-zero interest rates. The rules have been relaxed in light of Treasury bond yields often being below inflation…

Public debt is now so large that it is hard to imagine interest rates staying high for very long. Hence the appeal of bitcoin, which, due to its absolutely finite money supply, presents itself as a low-risk asset. More and more pension funds will take inspiration from what Microstrategy is doing.

Mr. Saylor’s company was the first publicly traded multinational to adopt bitcoin as a treasury asset. It currently holds over 210,000 BTC (14 billion $) and has just announced plans to raise 42 billion dollars to acquire more.

This strategy is currently a monumental success. Not only has the company seen its balance sheet swell by several billion dollars, but the price of its stock has skyrocketed.

Other companies have adopted the same strategy, notably Semler Scientific and Metaplanet. And if its shareholders vote in favor in December, the giant Microsoft should also join in.

Finally, let’s remind that Donald Trump has promised to establish a strategic bitcoin reserve if he is elected this Tuesday, November 5.