Arizona’s move to allocate up to 10% of public-pension and treasury assets into Bitcoin is a bold experiment in modernizing portfolio strategy—but it’s not without risks. On one hand, digital assets can offer diversification beyond traditional stocks and bonds, potentially boosting returns if Bitcoin continues its long-term appreciation. On the other hand, Bitcoin’s notorious volatility and regulatory uncertainty could expose retirees and taxpayers to steep losses. If Arizona successfully weathers these storms without compromising fiduciary duty, other states may feel emboldened to follow suit, especially those with underfunded pension plans seeking higher yields. Ultimately, this precedent will hinge on striking the right balance between innovation and prudence—crafting clear governance frameworks, robust risk controls and transparency around digital-asset allocations.

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