The Arizona State Senate has approved a resolution to explore the inclusion of Bitcoin ETFs in the Arizona State Pension. This resolution will prompt state pension fund managers and treasuries to assess the potential of incorporating Bitcoin ETFs.
Senator Jake Hoffman is spearheading the initiative to promote Bitcoin adoption in Arizona. With state pension funds in the USA collectively managing over $5.5 trillion in assets, a significant portion of which are dealing with funding deficits, this action is perceived as a strategic move to bolster portfolio diversification and mitigate investment risks.
Arizona considers using Bitcoin ETFs because of the belief in Bitcoin’s value and stability, similar to how people trust gold as a safe investment.
The Arizona State Senate Provisions for Bitcoin
Arizona state pointed out three main angles that the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement (PSPRS) bodies can check out the push for a Bitcoin ETF.
Firstly, they suggested looking into how adding a Bitcoin ETF could affect their investment portfolio. Secondly, the Senate mentioned keeping a close eye on developments in the Bitcoin ETF world. They also mentioned that the ASRS and PSPRS could explore the implications of adding the Bitcoin ETF, possibly by consulting with an issuer approved by the United States Securities and Exchange Commission (SEC).
If these steps are taken, they might then provide a detailed report on the feasibility, risks, and potential benefits of allocating some of the Assets Under Management by the retirement systems to Bitcoin ETFs. Although this recommendation isn’t mandatory yet, it’s a clear sign of the widespread interest in these new investment vehicles.
Investing in Bitcoin isn’t necessarily risky; in fact, not purchasing the Bitcoin ETF could be seen as the riskier choice, especially considering the significant underfunding of many pension funds. Earlier this year, John Palmer, president of the Chicago Board Option Exchange, predicted that the approval of a spot Bitcoin ETF would open doors for pension and retirement investment accounts to access Bitcoin through ETFs.
Resolution to Explore Bitcoin ETF
Many state pensions invest in gold ETFs to reduce risk in their portfolios. Adding a bit of gold has been shown to boost portfolio performance over the long haul, as gold tends to hold its value during economic turbulence.
Bitcoin is often referred to as the digital gold, and including it in a well-balanced portfolio could greatly reduce the chances of the portfolio losing its value during economic crises. Just like gold, Bitcoin is seen as a safe bet in times of financial uncertainty.
Spot Bitcoin ETF: The Latest Price Catalyst
Bitcoin has witnessed a consistent inflow of large liquidity since the ETFs got approved. Institutions are buying huge amounts of bitcoin—approximately 9000 BTC every day—which is far more than miners are mining. This huge demand for the digital assets has propelled the price to $69,000.
Bitcoin ETFs are less than 3 months old but they have already surpassed silver ETFs in terms of asset under management and they are on their way to dethrone gold. If the demand for bitcoin continues at this rate, it’s likely to surpass $100,000 within the next two years.
