California’s $500 Billion Pension Fund Split Over Bitcoin Exposure

The California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the U.S. with more than $500 billion in assets, is facing a growing debate over whether Bitcoin belongs in its portfolio. During a Wednesday board candidates’ forum, the six contenders vying for seats on the CalPERS Board of Administration expressed starkly divided opinions on crypto investments.

Despite the fund’s reluctance to buy Bitcoin directly, it already holds significant indirect exposure through 410,596 shares of Strategy (formerly MicroStrategy), valued at nearly $166 million. Since Strategy controls more than 636,000 BTC worth over $70 billion, CalPERS’ investment links it to the world’s largest corporate Bitcoin treasury.

Candidates Offer Conflicting Views on Bitcoin

The forum quickly revealed how polarized the candidates are when it comes to crypto. Incumbent David Miller strongly opposed the idea of Bitcoin investment, declaring:

“Cryptocurrency should not have a seat on our board and never should.”

He also took aim at challenger Dominick Bei, who founded a Bitcoin education nonprofit, Proof of Workforce. In response, Bei pointed out what he saw as a contradiction:

“CalPERS owns shares in the largest Bitcoin holding company in the world, MicroStrategy. Why hold indirect exposure while opposing direct investment?”

Other candidates echoed Miller’s skepticism. Challenger Steve Mermell flatly rejected the idea, saying:

“Hell no! Crypto is opaque, it has no place in a pension system.”

Mermell compared Bitcoin exposure to past financial disasters such as Enron and the Orange County bankruptcy, arguing that the risks outweighed potential rewards.

More Nuanced Positions Emerge

Not all candidates opposed Bitcoin outright. Challenger Troy Johnson took a cautious but open stance, acknowledging the risks while leaving the door open for future discussions.

“I’m very wary of hyper-sensitive investments like crypto,” Johnson said. “But I wouldn’t close the door entirely on it.”

Meanwhile, incumbent Jose Luis Pacheco distinguished between blockchain technology and cryptocurrencies. He dismissed Bitcoin as an investment option but described blockchain as “an emerging technology with promise,” suggesting CalPERS could explore partnerships and research in this area.

This divide reflects a broader struggle within institutional investing circles—while some view Bitcoin as too volatile, others see it as an inflation hedge and a store of value that pension funds cannot ignore.

Experts Weigh In on Volatility and Value

Industry experts also weighed in on the debate. Kadan Stadelmann, Chief Technology Officer at Komodo Platform, told Decrypt that Bitcoin’s volatility should not prevent pension funds from investing.

“Bitcoin is certainly not too volatile for pensions, especially in light of inflation,” he said.

Stadelmann argued that CalPERS was “too scared to invest directly into Bitcoin” and should instead consider self-custody to ensure public ownership of actual Bitcoin rather than exposure through middlemen like Strategy.

This expert view aligns with the perspective that Bitcoin has already been chosen by the market as a global store of value—something pensions may eventually need to acknowledge to safeguard long-term returns.

Other State Pensions Increasing Bitcoin Exposure

While California remains cautious, other U.S. pension funds have already ramped up their exposure to Bitcoin and related investment products.

• Michigan State Pension tripled its Bitcoin ETF exposure in Q2 2025, reporting 300,000 shares of the ARK 21Shares Bitcoin ETF worth $11.4 million—up from 100,000 shares earlier in the year.

• Wisconsin’s Investment Board holds over $387 million in Bitcoin ETF shares.

• Florida’s Retirement System owns 240,026 shares of Strategy valued at $97 million.

These moves highlight a growing trend among state pensions to diversify into digital assets, even if indirectly, as Bitcoin ETFs and corporate treasuries provide easier access to exposure.

The Road Ahead: November Election Could Shift Strategy

The outcome of the upcoming November election will determine whether CalPERS maintains its current indirect exposure to Bitcoin or reopens the conversation around direct crypto investment. With more than half a trillion dollars under management, any move by CalPERS could set a precedent for other pension systems nationwide.

At present, the board remains split between outright rejection, cautious exploration, and support for broader blockchain adoption. But with inflationary pressures, rising institutional interest, and Bitcoin increasingly seen as a legitimate asset class, the debate is far from settled.

Conclusion

California’s $500 billion pension fund finds itself at a crossroads on Bitcoin. While some candidates argue it is too risky and opaque for retirees’ savings, others believe ignoring it could mean missing out on long-term growth opportunities.

For now, CalPERS remains indirectly exposed through Strategy shares, but the pressure is building. With other states already boosting Bitcoin allocations, the question is whether California will continue to sit on the sidelines—or eventually embrace direct exposure to the world’s leading cryptocurrency.