Virginia Public Pension Funds Increase Their Investment in Bitcoin

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Even government employees are attempting to gain exposure to cryptocurrency.

Two Virginia public pension funds are requesting permission to invest directly in an investment vehicle that buys Bitcoin and other cryptocurrencies, as well as crypto derivatives.

If given approval by their respective boards, the Fairfax County Police Officers Retirement System (PORS) and Fairfax County Employees’ Retirement System (ERS) will invest $50 million in a Parataxis Capital Management fund, according to reporting from Bloomberg.

Both retirement systems within Fairfax, the 40th-largest county in the country, made news in 2018 for investing in blockchain technology when the ERS invested 0.3% ($10 million) of its holdings into the Morgan Creek Blockchain Opportunities Fund; PORS placed 0.8% ($11 million). They followed it up with another $52 million in total the following year.

However, the vast majority of that money is invested in enterprises responsible for cryptocurrency technology, with only 15% investing in cryptocurrencies itself. This fresh allocation represents a larger gamble by PORS and ERS on cryptocurrencies itself.

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It’s easy to see why they’d want more exposure, especially because the systems oversee billions of dollars in investment funds, the majority of which is earned by returns on employee and country contributions. A little but significant cryptocurrency bet can go a long way.

According to Nomics data, the price of Bitcoin has increased by 340 percent in the last year, which is very little when compared to the rest of the market. Ethereum increased by 800%, Solana increased by 5,400%, and Dogecoin increased by more than 8,700%. It wasn’t just about coins. Governance tokens for DeFi protocols, which allow users to trade and lend with one another without the use of an intermediary, also experienced significant gains.

What appeals to PORS is that crypto marketplaces do not adequately reflect the underlying value of cryptocurrencies. According to PORS Chief Investment Officer Katherine Molnar, “it’s a sector that’s going to expand in adoption and attention.” We think that it’s inefficient enough, so we think there are some alpha opportunities to take advantage of.”

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