Arizona to greenlight Bitcoin ETF addition to retirement portfolios

The Arizona State Senate has approved a bill to look into Bitcoin ETFs as potential additions to investment portfolios.

On Feb. 22, the Senate passed the bill in a 16-13 vote to urge the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to monitor further developments in Bitcoin ETFs. After the Senate’s approval, the House of Representatives is reviewing the bill.

The memorandum stresses the need for thoughtful deliberation before including such assets in their portfolios. The Senate prioritizes working with SEC-approved firms for Bitcoin (BTC) ETF listings.

Following recent regulations, ASRS and PSPRS must submit a consolidated report on the conditions, risks, and benefits of including Bitcoin ETFs in their portfolios. The ultimate goal is to equip ASRS and PSPRS with informed insights, potentially diversifying their portfolios and exploring new avenues for growth.

The report, which includes options and recommendations for safe investments, must reach state officials before the commencement of the 57th Regular Session of the Legislature three months later. 

Amidst discussions on ETFs, traditional investors are showing a preference for Bitcoin ETFs over gold. While both assets are traditionally viewed as hedges against inflation, recent data unveils a notable divergence in investor behavior.

Gold ETFs witnessed withdrawals of approximately $4.6 billion. At the same time, Bitcoin ETFs approved by the SEC on Jan. 11 attracted a staggering $8 billion in net investments, marking a record debut for these financial instruments.

Following the approval of the spot Bitcoin ETFs, there has been a noticeable surge in interest in Bitcoin. The green light for this ETF has acted as a catalyst, drawing attention to the crypto space. The appeal lies in its accessibility, allowing individuals to engage with Bitcoin without directly owning the cryptocurrency. 

Preventing crypto crime

A December report by TRM Labs reveals that 90% of surveyed participants, primarily from U.S. law enforcement, have received crypto-related training, with 99% expressing the need for more. Notably, 40% of offenses investigated by these organizations were linked to cryptocurrency.

Despite the growing complexity of criminals, over 60% of crypto investigations resulted in favorable outcomes. 87% of respondents in the survey consider blockchain analytics tools to be “very” or “extremely” important in achieving successful investigations.

In November 2023, US Senator Ted Budd introduced the “Keep Your Coins Act,” stressing the importance of self-custody for cryptocurrency owners. The bill is intended to prevent third parties from having a mandatory role in managing individuals’ crypto assets.

In the face of the FTX exchange collapse, which led to governmental attention to regulating cryptocurrencies, the proposed act provides an opposite narrative, concentrating on financial freedom and individual ownership of digital assets.

The bill aims to ensure that individuals have the right to carry out cryptocurrency transactions without being required to use third-party intermediaries. Against this backdrop of current woes, blockchain comes in to fill the gaps and prove to be the future of financial intermediation.