Earlier this week, two pension funds from Fairfax County, Virginia decided to invest in cryptocurrencies. The funds, which are controlled by the Fairfax County Retirement Systems (FCRS), invested $21 million, of which $11 million came from the county’s police officer’s fund and $10 million came from the county employee’s retirement fund. The decision must have ruffled a few feathers, because the director of the FCRS, Jeff Weiler, felt compelled to explain the move in a blog post.
Weiler acknowledges that the FCRS placed the money with the Blockchain Opportunities Fund offered by Morgan Creek. However, he points out that the amount of the investments only represented 0.8% of the police officer’s available assets and 0.3% of the county employee’s assets – a relatively small amount compared to other investments it has made.
The executive continues, stating, “All investments involve risk and this investment is no different. However, as they would do with any investment, Fairfax’s investment team determined that the expected returns from this investment were in line with the level of risk incurred. This also played a big part in how much was invested.”
The investment is sound. Cryptocurrencies are here to stay, much to the chagrin of fiat pundits, and if Bitcoin Core (BTC) bounces back to $5,000, an investment of $5 million would net $1.9 million – and this is certainly not an unrealistic goal.
BTC has already regained some of its position, currently sitting at $3,631, according to CoinMarketCap. There’s a good chance that it will continue to climb and could reach $5,000 within the next couple of months.
Morgan Creek had hoped for a larger investment, trying to convince the FCRS to put in as much as 15%. This would have been a much riskier situation with the potential for greater losses, and allocating just a small portion of the funds’ assets to crypto is a step into the space without jeopardizing a considerable amount of hard-earned money.
The Blockchain Opportunities Fund isn’t about investing in just digital currencies. Morgan Stanley points out that the fund will be used to invest in blockchain companies, as well, and singles out Bakkt and Coinbase as two examples. Since crypto exchanges make money regardless of whether the market moves up or down, they can be a safer investment than dumping large amounts of cash directly into the currencies themselves.
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