Bitcoin ETFs Addition to Arizona State Retirement Portfolios Likely

Bitcoin ETFs Addition to Arizona State Retirement Portfolios Likely

The Arizona state senate is debating a bill that encourages the inclusion of Bitcoin exchange-traded funds (ETFs) in the retirement plans undertaken for government employees. The bill promoters cite the accelerated growth realized by the Bitcoin ETFs since their approval by the US Securities and Exchange Commission (SEC). 

The Grand Canyon State lawmakers believe that government workers would leverage the accelerated growth portrayed by Bitcoin ETFs. The proposal is captured in the Senate Concurrent Resolution 1016 by Senators Warren Petersen and Jake Hoffman alongside Representative Joseph Chaplik.

The non-binding resolution illustrates the explosive market interest in Bitcoin and Bitcoin ETFs, predominantly in February. The leading crypto by market capitalization surpassed $1.3 trillion following the price surge, with the global assets under management that filed for the Bitcoin ETFs adding over $16 trillion. 

Arizona Resolution Plans to Avail Bitcoin ETFs to State Retirement Funds

The Arizona resolution plans to make the Bitcoin ETFs available to those who invest in high-value, including gold and silver ETFs. The resolution sponsors indicated that the federal government held approximately 200,000 Bitcoins, translating to $13.452 billion. Similarly, the lawmakers consider it prudent for Arizona’s state retirement systems to assess their members’ interests. 

The Arizona lawmakers’ bill focusing on Bitcoin does not shut the door for other crypto-based ETFs. The legislation proposal leaves the opportunity for other crypto ETFs amid the highly anticipated approval of the Ethereum ETFs by the Gary Gensler-led SEC. 

The lawmakers indicated that the Arizona State Retirement System and Public Safety Personnel Retirement System coordinate with the State Treasurer’s office to assess the potential gains and risks arising from Bitcoin and crypto ETFs. The resolution considers the assessment necessary, citing the evolving regulatory landscape and expanding market capitalization. 

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The proposers of the resolution urged the state retirement to evaluate the feasibility of Bitcoin and crypto ETFs, as well as their benefits and risks, before undertaking crypto investments. The resolution backers inquired about the recommendations for submission to key state officials. 

Bill promoters argue that realizing the Bitcoin exposure will yield benefits to pension plans. The argument echoes the sentiments shared by entrepreneur Anthony Pompliano four years ago. 

Investor Pompliano recalled his December 2018 call urging pension funds to consider purchasing Bitcoin in a detailed explanation of the public benefits. The investor revisited various excerpts from the 2018 letter. The entrepreneur indicates that pension funds should consider committing 1% of their assets to Bitcoin as exposure that will result in material impact. 

Pompliano argues that government pension funds have, in recent years, struggled to satisfy the obligations to retirees nationwide. He considers that if every state pension fund were to acquire 1% of the Bitcoin exposure in 2018, the move would yield 14 fully funded state pension funds from four. 

Pompliano agrees with the Arizona bill sponsors that the past cannot be reversed. Instead, he urges changes to shape the future. 

The investor downplays the claims that pension funds should forego acquiring Bitcoin since the returns are already captured. He disagrees with such thoughts to suggest optimism in yielding gains in Bitcoin exposure.  

Arizona Public Funds to Replicate BlackRock in Adding Bitcoin Exposure

The bill to encourage public funds to acquire Bitcoin ETFs will replicate move by other funds seeking to expand their exposure to Bitcoins. The largest asset management firm, BlackRock, recently confirmed adding $778 million worth of Bitcoin via its ETF. 

The addition by the Larry Fink-led coincides with the Bitcoin rally manifesting a wild Tuesday to set the all-time price of $69,000. However, Bitcoin plunged below $61,000, though it would recover fast amid the buzz of realizing a new peak aided by Bitcoin ETF mania. 

BlackRock appears to dictate the trend that other public funds could replicate in snatching huge Bitcoin amounts to satisfy the growing hype. As such, BlackRock’s iShares Bitcoin ETF (IBIT) realizes a Bitcoin inflow estimated at $778.3 million, as per BitMEX Research data. 

The BitMEX report data shows that BlackRock added 12,447.3 Bitcoins. The Senate Concurrent Resolution 1016 promoters seek to add Bitcoin exposure to the public plans.

Editorial credit: Beneath Blue / 

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