U.S. pension funds are beginning to explore investments around bitcoin and other cryptocurrencies, a move that could expose millions of former teachers, police officers, firefighters and other retirees to the wild ups and downs of a largely unregulated financial product. Are these people crazy? Via the Washington Post:
In at least five states, industry lobbyists have aggressively hawked the idea, aiming to woo local lawmakers with the promise that digital assets can deliver sky-high profits — often without fully acknowledging the possible risks.
The emerging sales campaign contrasts with the broad warnings in Washington that investing in cryptocurrency could leave retirees’ life savings vulnerable to “fraud, theft and loss.” Federal officials first sounded those alarms even before the disastrous collapse of crypto giant FTX in 2022, which troubled a handful of pensions globally that had indirect exposure to a company that once seemed like a profitable tech juggernaut.
In response, the crypto industry has launched a sprawling national campaign that aims to ward off regulation and elect candidates — including former president Donald Trump — who have promised to lessen federal oversight around digital assets.
Personally, this reminds me of what happened in California’s Orange County 30 years ago, when their treasurer invested heavily in derivatives and other volatile instruments. It led to the largest municipal bankruptcy ever. Oh well!
