Pension funds are beginning to dabble in crypto investing, opening the door for a broader discussion about whether investment managers should embrace the risk profile of digital assets.
Driving the news: The Fairfax County Board of Trustees in northern Virginia recently authorized its $6.8 billion pension funds to begin investing in the area of crypto lending, the Financial Times reports.
Why it matters: The success or failure of pension funds enables them to distribute checks to retirees and affects the budgets of cities, counties, school districts and states that are on the hook to make pension contributions.
Reality check: For now, crypto does not represent a meaningful slice of pension assets.
The big picture: Pension funds throughout the country are feeling pressure to bolster their returns as they face declining asset values due to the stock market selloff of 2022 and unrealistically optimistic investment return expectations.
Of note: Several crypto lending companies have recently tumbled into bankruptcy, including Celsius Network and Voyager.
What we're watching: Whether more pension funds get the crypto bug and how their initial investments perform.
