California’s $500B Pension Fund Divided Over Bitcoin Exposure

The California Public Employees’ Retirement System (CalPERS) is facing internal division over Bitcoin (BTC) exposure. It is the largest public pension fund in the United States with $506 billion in assets. The department is divided on whether BTC should be part of the investment strategy or not. A debate on BTC’s inclusion occurred during a recent board candidate forum in which the differences of opinion on BTC’s inclusion in a retirement portfolio were discussed.

CalPERS Divided Over BTC Inclusion in Public Pension Fund

Although CalPERS does not directly hold Bitcoin, it currently owns 410,596 shares of MicroStrategy, now rebranded as “Strategy,” valued at roughly $165.9 million. The company, led by Michael Saylor, holds over 636,505 BTC worth more than $70 billion, effectively making it the world’s largest corporate Bitcoin holder. This indirect exposure has raised questions from candidates about the fund’s consistency in its stance on digital assets.

Candidate Dominick Bei, who runs a Bitcoin education nonprofit, challenged opponents of crypto investment. CalPERS “owns shares in the largest bitcoin holding company in the world, MicroStrategy” he argued, pressing the point that indirect exposure contradicts anti-Bitcoin positions.

Incumbent David Miller rejected the notion of direct Bitcoin investment, criticizing Bei’s nonprofit during opening remarks. He distinguished between investing in companies that operate with Bitcoin and the act of buying Bitcoin itself, calling the latter too risky for a pension fund.

Challenger Steve Mermell was far more blunt, declaring “Hell no!” when asked about crypto. He compared Bitcoin to past financial debacles such as Enron and the Orange County bankruptcy, labeling it “opaque” and unsuitable for pensions.

Others struck a more cautious tone. Challenger Troy Johnson admitted he was “wary of hyper-sensitive investments like crypto” but refused to shut the door on future consideration. Incumbent Jose Luis Pacheco dismissed Bitcoin as an option but suggested blockchain technology warranted further study through research and partnerships.

Industry experts weighed in as well. Kadan Stadelmann, CTO at Komodo Platform, countered claims that Bitcoin was too volatile, arguing it has proven itself as a store of value, particularly amid inflation. He suggested CalPERS should eventually hold Bitcoin directly, ideally in self-custody.

Meanwhile, other state pension systems are cautiously increasing exposure. Michigan’s pension fund tripled its Bitcoin ETF holdings to $11.4 million in Q2, Wisconsin’s Investment Board holds over $387 million in Bitcoin ETFs, and Florida’s system owns nearly $97 million worth of MicroStrategy shares.

The November board election will decide whether CalPERS maintains its current indirect approach or entertains discussions on direct digital asset exposure. With candidates deeply divided, the outcome could shape the future of one of the world’s most influential pension funds in the era of digital finance.