- A new report finds that American pension systems are increasing their allocations to Bitcoin, Ethereum, and stablecoins, but avoiding other altcoins.
- Market volatility has called these allocations into question, with 11 pension funds recently losing more than $250 million after the Strategies stock crash.
There is a heated debate in regulatory and investment circles over whether pension funds should include cryptocurrencies in their portfolios. But despite the ongoing debate, a new report finds that these funds have been quietly increasing their exposure in an effort to outperform the market’s average returns.
The report, titled “U.S. Public Pension and Trust Fund Investments in Digital Assets,” was compiled by the Reason Foundation, a Los Angeles-based public policy think tank. Interest in cryptocurrencies among pension funds is rapidly growing, with some funds already investing in these assets and others exploring options, it has been revealed.
A small number of funds purchase cryptocurrencies directly. Most companies are opting for regulated methods, such as using exchange-traded funds (ETFs) or buying shares in companies with high exposure to cryptocurrencies, such as Michael Saylor Strategy. In total, the pension funds have about $1 billion invested in crypto assets and related assets, Reason said.
Examines key policy considerations and develops a framework for public pension plan investments in Bitcoin and other cryptocurrencies.
https://t.co/1EDggsOt3l
— Reason Foundation (@ReasonFdn) February 11, 2026
Dozens of countries outside the United States are also seeing increased interest in cryptocurrencies from pension funds. Last year, Coinbase and OKX launched a new product targeting Australian pension funds, a sector worth $2.3 trillion. As we reported last month, this interest was highest among Gen Z and Alpha at 20%, according to a report from the Bitget exchange.
The era of Bitcoin pensions
As Reason points out, pension funds allocate resources to different assets for hedging, profiting from price appreciation, and diversification. Some assets, such as gold, satisfy all three, so Bitcoin could be the next asset these funds turn to.
In recent years, cryptocurrencies have been controversial for pension funds. A report released a week ago found that 11 state pension funds in the United States had purchased Saylor Strategy stock. Of these, only one company was not in the red at the time, and the other 10 companies were losing money by an average of 60%. In total, they had losses of more than $250 million. This included the New York State Common Retirement Fund, one of the largest in the country with $280 billion in assets under management, which lost $53 million.
This is not the first time pension funds have lost millions of dollars to cryptocurrencies. When the infamous exchange FTX collapsed four years ago, Canada’s Ontario Teachers’ Pension Plan lost nearly $100 million it had invested in the exchange. Canada’s second-largest pension fund, the Quebec Savings Fund, suffered a loss of $150 million.
However, many people are making hundreds of millions of dollars investing in cryptocurrencies. The California Public Employees Retirement System, which has $500 billion in assets under management, remains an investor in Coinbase, the largest cryptocurrency exchange in the United States.
President Trump signed an executive order in August allowing 401(k) pension funds to invest in Bitcoin, and more of these investments are likely to follow.
“My administration will reduce the regulatory burdens and legal risks that prevent America’s worker pension funds from achieving competitive returns and diversifying the assets they need to enjoy a secure and comfortable retirement,” the pro-crypto Republican president said.
