The Florida Chief Financial Officer proposed researching the possibility of investing in Bitcoin for the state's $205 billion retirement fund to diversify the portfolio and hedge against market volatility.
On October 29, Mr. Jimmy Patronis, the Chief Financial Officer of Florida, sent a letter requesting the Florida State Retirement Agency (SBA) to consider adding Bitcoin to its investment portfolio. This move reflects the growing trend in the U.S. where states are looking to integrate cryptocurrency into retirement funds.
In a letter to Mr. Chris Spencer, the executive director of the SBA, Mr. Patronis emphasized that Bitcoin, often referred to as "digital gold," has the potential to diversify the investment portfolio and mitigate risks from fluctuations in traditional assets.
Source: Jimmy Patronis
He suggested that the SBA prepare a report assessing the feasibility, benefits, and potential risks of allocating a portion of the retirement fund to digital assets. This report will be presented before the legislative session on March 4, 2025. The SBA currently manages more than 30 funds, including the Florida Retirement System Trust Fund (FRS), with total assets reaching $205 billion as of September 30.
The potential and challenges of investing in Bitcoin
In addition to researching for FRS, Mr. Patronis also proposed implementing a pilot program for cryptocurrency investment within the framework of the Florida Development Fund. This fund is allowed to use up to 1.5% of the value of FRS assets and has invested nearly $1 billion in high-growth sectors during the 2022-2023 period.
Mr. Patronis believes that investing in Bitcoin could yield higher returns for the retirement fund, thus ensuring benefits for beneficiaries such as firefighters, teachers, and police officers. This move is also in line with the views of Florida Governor Ron DeSantis, who opposes the implementation of central bank digital currency (CBDC).
Jimmy Patronis requested that the SBA prepare a report on the investment potential of Bitcoin. Source: Florida CFO
If Florida decides to invest in Bitcoin, the state will join the ranks of pioneering states like Wisconsin and Michigan. In May, the Wisconsin Investment Board (SWIB) invested $164 million, equivalent to 0.1% of total managed assets, in Grayscale and BlackRock's spot Bitcoin ETFs. Similarly, the Michigan State Retirement System also purchased 110,000 shares in ARK 21Shares ETF, representing 0.003% of its portfolio, in July.
