tl;dr
A debate over the role of cryptocurrency in the $506 billion California Public Employees’ Retirement System (CalPERS) emerged during a forum for board candidates, revealing a split among contenders over whether Bitcoin should be directly invested in or only held indirectly through companies like S...
**CalPERS Forum Sparks Crypto Debate: A Clash of Visions for the $506 Billion Pension Fund**
The air was thick with tension during Wednesday’s forum for the California Public Employees’ Retirement System (CalPERS) board candidates, where the future of cryptocurrency in the state’s $506 billion pension fund became a lightning rod for debate. With six contenders vying for seats on the Board of Administration, the discussion revealed a stark divide over whether Bitcoin—and by extension, the digital assets it represents—deserves a place in CalPERS’ portfolio.
At the heart of the controversy is CalPERS’ indirect exposure to Bitcoin through its holdings in **Strategy**, the Bitcoin treasury company founded by Michael Saylor. According to its Q2 13F filing, CalPERS owns 410,596 Strategy shares valued at $165.9 million, granting it substantial indirect exposure to the company’s 636,505 BTC holdings, worth over $70 billion. Yet, this indirect stake has become a point of contention, with candidates questioning why the fund hasn’t embraced direct investment.
**“Cryptocurrency should not have a seat on our board and never should,”** declared incumbent David Miller, launching a sharp critique of challenger Dominick Bei during opening remarks. Miller’s comments were a direct jab at Bei’s Bitcoin education nonprofit, Proof of Workforce, and his argument that CalPERS’ indirect exposure through Strategy contradicts its reluctance to invest directly.
Bei fired back, pointing out that **CalPERS already owns shares in MicroStrategy**, the largest Bitcoin-holding company in the world. “If we’re comfortable holding shares in a company that’s deeply invested in Bitcoin, why not consider direct investment?” he asked, challenging the board’s apparent contradiction.
The debate took on new dimensions as candidates grappled with the volatility of Bitcoin versus its potential as a hedge against inflation. **Kadan Stadelmann**, CTO of Komodo Platform, argued that Bitcoin’s volatility is overstated, especially in the context of rising inflation. “The market has clearly chosen Bitcoin as a store of value,” he said, criticizing CalPERS for being “too scared to invest directly” and instead relying on intermediaries. He urged the fund to hold Bitcoin in self-custody, ensuring the public owns the asset itself rather than trusting third parties.
Not all candidates shared this optimism. **Steve Mermell**, another challenger, was unequivocal: “Hell no!” to crypto’s inclusion in CalPERS. Drawing parallels to past financial disasters like the Orange County bankruptcy and Enron scandal, he called Bitcoin “opaque” and warned that it has “no place in a pension system.” His stance echoed the skepticism of others, including **Troy Johnson**, who acknowledged concerns but left the door slightly ajar. “I’m very wary of hyper-sensitive investments like crypto,” Johnson said, though he added he wouldn’t “close the door entirely on it.”
Meanwhile, **Jose Luis Pacheco**, an incumbent, took a middle path. While rejecting Bitcoin as an investment, he praised blockchain technology as “an emerging opportunity with promise,” advocating for CalPERS to explore partnerships and research rather than direct crypto holdings.
The debate isn’t confined to California. Other state pension funds have taken bolder steps. **Michigan’s** state pension tripled its Bitcoin ETF holdings to $11.4 million in Q2, while **Wisconsin’s** Investment Board holds over $387 million in Bitcoin ETF shares. **Florida’s** retirement system, meanwhile, maintains 240,026 Strategy shares worth $97 million, mirroring CalPERS’ indirect approach.
As the November election looms, the question remains: Will CalPERS continue its cautious, indirect strategy—or finally take a leap into direct crypto investment? The candidates’ divided views reflect a broader tension within institutional finance, where the allure of Bitcoin’s potential clashes with its risks. For CalPERS, the outcome of the election could shape not just its portfolio, but its legacy in the evolving world of digital assets.
What do you think? Should CalPERS take the plunge, or is indirect exposure the safer bet?