CalPERS Board Divided Over Bitcoin as Pension Fund Weighs Digital Future

The California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the United States with more than $506 billion in assets under management, finds itself at the center of a heated debate over Bitcoin. While the fund already holds indirect exposure to the world’s largest cryptocurrency through its $165.9 million stake in MicroStrategy, candidates vying for seats on the CalPERS board remain deeply divided on whether Bitcoin should be part of the retirement system’s investment strategy.

The controversy highlights the growing tension between traditional pension systems, which are tasked with safeguarding long-term financial security for millions of retirees, and the rapidly evolving world of digital assets. For CalPERS, the decision could mark a turning point in how one of America’s most influential institutional investors approaches the future of finance.

CalPERS’ Indirect Exposure to Bitcoin

Though CalPERS has never directly purchased Bitcoin, its investment portfolio includes more than 410,000 shares in MicroStrategy, a publicly traded software firm that has transformed itself into the world’s largest corporate holder of Bitcoin. Under the leadership of executive chairman Michael Saylor, MicroStrategy has accumulated 636,505 BTC, currently valued at over $70 billion.

This indirect exposure places CalPERS in a paradoxical position. On one hand, the pension fund benefits from MicroStrategy’s aggressive Bitcoin strategy whenever prices surge. On the other, it avoids the reputational and regulatory risks that might accompany direct Bitcoin purchases. This distinction became the focal point of a recent candidate forum, where six contenders for CalPERS board seats clashed over the role of digital assets in the fund’s future.

Candidate Forum: A Clash of Perspectives

During the forum, incumbent board member David Miller issued one of the strongest criticisms of cryptocurrency to date, openly dismissing its place in CalPERS’ portfolio. Pointing to challenger Dominick Bei’s nonprofit initiative, Proof of Workforce, which provides Bitcoin education, Miller argued that virtual currencies should not influence CalPERS’ governance.

“Cryptocurrency should not have a seat on our board and never should,” Miller said, warning that direct exposure to Bitcoin could put retirees’ savings at risk.

Bei, however, countered that argument by highlighting CalPERS’ existing holdings. “CalPERS already owns shares in the largest Bitcoin-holding company in the world,” he said. “How can we justify indirect exposure while refusing to even discuss the merits of direct investment?”

The exchange underscored the philosophical divide within CalPERS’ leadership. Miller insisted that investing in a company that engages in Bitcoin-related activities is fundamentally different from directly holding the asset itself. “Buying shares of a business with Bitcoin exposure is not the same as taking custody of Bitcoin,” he argued.

Industry Experts Weigh In

The debate has not gone unnoticed by industry leaders. Kadan Stadelmann, CTO of Komodo Platform, observed that CalPERS’ reluctance reflects broader institutional hesitancy. “They are basically too scared to invest directly into Bitcoin,” he said. “But the market has already chosen Bitcoin as a store of value. Bitcoin is certainly not too volatile for pensions—it’s only perceived that way because of its relative newness.”

Stadelmann’s view echoes a growing chorus within the crypto industry that sees Bitcoin as increasingly mature and suitable for long-term holdings. Advocates argue that Bitcoin’s limited supply and growing institutional acceptance make it comparable to digital gold, a potential hedge against inflation and currency devaluation.

Pension Funds Around the World Turn to Crypto

While CalPERS remains hesitant, pension funds worldwide are exploring digital assets at an accelerating pace. Since 2019, retirement systems in Australia, South Korea, Japan, and parts of Europe have tested strategies to include cryptocurrencies in their portfolios.

Australia, for example, has become a pioneer in crypto-based retirement savings. Self-managed superannuation funds (SMSFs) in the country held more than $3 billion in digital assets as of mid-2025, according to official data. However, analysts note that these funds still underperformed compared to the broader crypto market this year, missing out on much of Bitcoin’s recent rally.

In North America, a handful of smaller pension funds have begun experimenting with digital assets as well. The Houston Firefighters’ Relief and Retirement Fund made headlines in 2021 when it became one of the first U.S. pension funds to directly invest in Bitcoin and Ether. Though modest in size compared to CalPERS, such moves have been seen as test cases for broader adoption.

The Risk-Reward Dilemma

For CalPERS, the core issue is risk management. Pension funds have fiduciary duties to protect retirees’ savings, making them inherently conservative investors. While Bitcoin has delivered extraordinary returns since its creation in 2009, it has also experienced sharp drawdowns that could challenge long-term planning for pensions.

Critics like Miller argue that Bitcoin’s volatility could undermine financial stability for the fund’s 2 million members. They point to events such as the 2022 crypto crash, when Bitcoin fell more than 70% from its peak, wiping out trillions in market capitalization.

Proponents, however, argue that volatility should not disqualify Bitcoin. Instead, they suggest a small, carefully managed allocation could improve CalPERS’ portfolio diversification and hedge against inflation. “Pension funds already invest in equities, private equity, and real estate—each of which carries its own risks,” Bei noted. “Bitcoin deserves to be evaluated on the same terms.”

Broader Implications for Institutional Finance

The outcome of CalPERS’ internal debate could ripple far beyond California. As the largest public pension fund in the United States, its investment decisions often set the tone for other institutional investors. If CalPERS were to formally embrace Bitcoin, even in a limited capacity, it could pave the way for broader adoption among pension systems nationwide.

Such a move would also signal a major milestone in Bitcoin’s journey toward mainstream legitimacy. While hedge funds, corporations, and family offices have increasingly entered the crypto space, public pension funds have largely stayed on the sidelines. CalPERS’ participation could mark a turning point in the institutional acceptance of digital assets.

Looking Ahead

For now, CalPERS continues to tread cautiously. Its indirect stake in MicroStrategy provides exposure to Bitcoin’s upside while insulating the fund from direct custodial and regulatory challenges. Whether that stance changes will depend not only on market conditions but also on the composition of its board following the upcoming election.

As the debate unfolds, one thing is clear: Bitcoin has firmly entered the conversation at the highest levels of institutional finance. For retirees depending on CalPERS, the question is no longer whether digital assets exist, but whether they should play a role in securing their financial futures.

Source:  https://www.coingabbar.com/en/crypto-currency-news/calpers-holds-165m-in-microstrategy-but-cautious-with-btc

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