In late 2025, North Carolina Retirement Systems began investing pension funds in cryptocurrency, following a contentious law enacted by legislative leaders. This decision was met with strong opposition from state employees who contribute to the pension plan, highlighting a growing divide over cryptocurrency investments.

As a result of this venture into the volatile crypto market, North Carolina has experienced significant financial setbacks. Over $33 million in value has been lost since September 30, resulting in a drop of more than half the worth of the state’s cryptocurrency portfolio. Additional losses in crypto-related investments further compound the situation, drawing concerns from employee advocates.

This paper loss accounts for less than 1% of the overall $140 billion pension fund. Despite the losses, state officials maintain that it’s too soon to make definitive judgments about the future of these investments. The State Treasurer, Brad Briner, emphasized the long-term perspective needed for such investments.

Current Investment Portfolio and Market Performance

The state’s investment in a cryptocurrency fund called Strategy was valued at $51 million as of September 30. However, by the end of the week, its worth plummeted to just $18 million, down approximately 65%. Despite these fluctuations, Briner remains optimistic, noting that pension fund strategies aim for growth over decades rather than months.

North Carolina’s investment strategy also includes stakes in major companies such as NVIDIA, Microsoft, and Amazon. These represent a much larger percentage of the total portfolio compared to cryptocurrency holdings. Nevertheless, as crypto and associated stocks like Coinbase and Robinhood experience profound declines, questions about the prudence of such investments linger.

Advocates Question Cryptocurrency’s Suitability for Pension Funds

State employee advocates argue that the volatility of cryptocurrency makes it an unsuitable investment for long-term pension plans. Ardis Watkins, a leader of the State Employees Association of North Carolina, described cryptocurrency as a “roller coaster,” emphasizing the unpredictable nature of its value.

Political Dynamics Around Cryptocurrency Investment

The push to integrate cryptocurrency into the state pension system was partly driven by political dynamics, as younger lawmakers were more receptive to the concept. Amid resistance from older colleagues and state employees, the initial proposal to invest 10% of pension funds in cryptocurrency was scaled back to 5%, and Briner has yet to reach that cap.

Looking Forward: Strategies and Perspectives

Despite the current downturn, supporters like State Rep. Mike Schietzelt advocate for remaining engaged in the crypto market. He acknowledges the cyclical nature of cryptocurrency, arguing that the potential for significant returns is worth the risks involved. However, concerns remain about the long-term viability of using cryptocurrencies for pension funding.

Briner continues to reassure stakeholders that the focus remains on securing and growing the retirement funds, acknowledging that all investments experience fluctuations. As he noted, while the crypto market is volatile, the state will not hastily abandon its holdings but instead will carefully monitor their performance.