I’m kinda surprised a state pension fund was one of the first to jump in. This has been a long standing problem, ppl living longer and yields getting increasingly difficult to obtain
Discussion
I'm an unbeliever so I may be biased
But the volatility of BTC could screw them royally
It's insane to speculate with pension funds like this
It’s actually the opposite. They are screwed without btc . Few
They have fiat liabilities, not real liabilities
Eh that’s kinda coping. Can we agree at least that they want to improve their balance sheets and btc will help that? Lol
BTC might help or it might blow them up. They can't have 'diamond hands' because they have to continue making fiat payments as they go.
Best case scenario BTC over their time horizon is a +EV bet (but not a sure thing, even if you think long run BTC is a sure thing)
But pension funds aren't hedge funds. They're not supposed to make +EV bets that could fail to pay off (unless they make a lot of small ones which are uncorrelated). In financial engineering terms, BTC functions as a liquidity sink, which makes it highly correlated with other assets.
Thus it is highly irresponsible for a fiat pension fund to invest in Bitcoin.
As I said, I am an unbeliever so I think it is a strongly negative EV bet. But even if I'm wrong about that it's not the sort of thing they should be invested in.
It would only blow them up if supply and demand no longer determined price