By Dan Christensen, FloridaBulldog.org
Republican legislators have filed bills that would authorize politicians and bureaucrats who oversee Florida’s General Revenue Fund, the Florida Retirement System (FRS), the Hurricane Catastrophe Fund and other huge state funds to invest up to 10 percent of their cash in risky Bitcoin and “other digital assets.”
Those public funds, which hold tens of billions of dollars, should be allowed to convert a chunk of it to Bitcoin, a highly volatile asset, as a “hedge against inflation,” according to the bills’ sponsors State Sen. Joe Gruters, R-Sarasota (SB 550) and Rep. Webster Barnaby, R-DeLand (HB 487).
Specifically, the nearly identical bills would bestow that substantial new power to the state’s chief financial officer, currently Jimmy Patronis, and with the State Board of Administration (SBA), which oversees the FRS and other funds. Its trustees are Gov. Ron DeSantis, Attorney General James Uthmeier and Chief Financial Officer Patronis, who resigned to run for Congress in November effective March 31.
Like Gruters, Patronis appears already sold on Bitcoin. In October he wrote to SBA executive director Chris Spencer requesting a report on the “feasibility, risk and potential benefits” of investing state funds in digital assets.
“When managing state pensions for firefighters, teachers and police officers, it’s also essential to prioritize the bottom line and ensure the best return on investment for Floridians,” Patronis said. “This is where the potential of investing in cryptocurrency, like Bitcoin, becomes particularly compelling.”
Gruters, former chairman of the Republican Party of Florida, announced last June that he’s running for CFO in 2026 when Patronis’s term ends. In the meantime, he’s angling for DeSantis to appoint him to the job – despite a spat with the governor exacerbated when Gruters chaired Donald Trump’s presidential campaign in Florida when DeSantis was still in the race.
BITCOIN A ‘PONZI SCHEME’
The push to invest state money in Bitcoin, a largely unregulated cryptocurrency used to make electronic payments from one party to another without going through a financial institution, comes despite warnings by numerous financial experts who believe Bitcoin is a dangerous fraud.
“I’m a major skeptic on crypto tokens which you call currency, like Bitcoin. They are decentralized Ponzi schemes,” J.P. Morgan Chase CEO Jamie Dimon told the U.S. House Financial Services Committee in September 2022.
Time hasn’t changed Dimon’s mind. In an interview last month with CBS’s Lesley Stahl, he said, “Bitcoin itself has no intrinsic value. It’s used heavily by sex traffickers, money launderers, ransomware. So I, I just don’t feel great about Bitcoin.”
Bitcoin was created in 2008 by an unknown person using the name Satoshi Nakamoto. Nakamoto authored a white paper that described a Bitcoin cryptocurrency in detail and devised its blockchain, or cryptographically database ledger that is both allegedly secure and accessible by anyone to verify transactions.
There is much, much more to understanding Bitcoin, such as to the reasons Nakamoto limited the supply to 21 million coins that are divisible to eight decimal places. But its best-known characteristic is its volatility, with price swings of thousands of dollars in just a few days.
On Thursday at 5 p.m., one Bitcoin was equal to $96,709.16. On Sept. 5, however, it was priced at $53,997.96.
A LOT OF ‘WHEREAS’
Here are the various “whereas” assertions in Gruters’s bill that seek to justify its adoption: “Whereas, inflation has eroded the purchasing power of assets held in state funds managed by the Chief Financial Officer, and this erosion diminishes the value of the state’s reserves, affecting the financial stability and economic security of this state, its taxpayers and its residents.”
“Whereas, through its history, Bitcoin has greatly risen in value and is becoming more widely accepted as an international medium of exchange, and countries around the world, including the United States, hold Bitcoin within their treasury departments.”
(The U.S. currently holds 207,0189 Bitcoins as of Dec. 13, nearly all of it from law-enforcement seizures, according to various news accounts.)
“Whereas Bitcoin is viewed as a hedge against inflation by sovereign nations and prominent investment advisors, including Blackrock, Fidelity and Franklin Templeton and Whereas the state should have access to tools such as Bitcoin to protection against inflation.”
That final whereas neglects to mention that Fidelity and those other investment advisors charge fees for handling crypto transactions. Likewise, it neglects to mention that Fidelity and the others offer their customers substantial warnings, like this one used by Fidelity:
“Crypto is for investors with a high risk tolerance. Crypto as an asset class is highly volatile, can become illiquid at any time, and is for investors with a high risk tolerance. Investors could lose their entire investment. Crypto may also be more susceptible to market manipulation than securities. Crypto is not insured by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Investors in crypto do not benefit from the same regulatory protections applicable to registered securities.”
The bill’s whereases don’t say whether the state’s firefighters, teachers, police officers or other employee stakeholders in the Florida Retirement System have given their approval to the proposed change. Or the citizens of Florida, for that matter.
FRS ALONE HOLDS $204.77 BILLION
Gruters’s bill would also give the CFO “and other parties with the permission of the CFO” the power to “loan the Bitcoin in state funds to generate additional returns for this state if such loans do not increase financial risk. The Chief Financial Officer shall adopt rules governing such loans.”
Loans to who? For what purpose? Without increased risk? It all sounds rather open-ended.
Further, Gruters’s bill says that “taxes or fees paid to the state in Bitcoin must be transferred to the General Revenue Fund. The General Revenue Fund shall reimburse the designated fund for the value of the Bitcoin payment in United States Currency for such taxes or fees.”
That would seem to sneakily authorize the use of Bitcoin to pay various state taxes. In 2022, Gov. DeSantis stated publicly that Florida should be willing to accept tax payments in Bitcoin, but it hasn’t happened.
So how much money are we talking about?
Florida’s General Revenue Fund, which accounted for about 42 percent of all state appropriations in 2024-2025, $48.26 billion, according to the Florida Policy Institute. Various state trust funds accounted for $29.967 billion.
The Florida Retirement System Pension Plan’s total assets (unaudited) as of Jan. 31, 2025 were $204.77 billion. The FRS’s investment plan’s total assets were $18.942 billion. The reported monthly actual returns on those investments for November were 5.41 percent for the pension plan and 7.76 percent for the investment plan.
Chris Spencer, the executive director of the Board of Administrators, did not return Florida Bulldog phone messages seeking comment.
In 2022, DeSantis signed legislation that defined and deregulated cryptocurrency in Florida.
TRUMP GETS INTO THE CRYPTO ACT
During the presidential campaign, President Trump branded himself as the pro-crypto candidate, promising to start a strategic national crypto stockpile.
The day after last month’s inauguration, Trump signed an executive order revoking President Biden’s executive order 14067 – “Ensuring Responsible Development of Digital Assets” – and announcing a number of measures intended “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”
Trump’s action followed the creation by he and his family last fall of World Liberty Financial – “The Only Crypto DeFi Platform supported by Donald J. Trump” – where visitors are pitched so-called “WLFI tokens” with the come on “Shape a new era of finance.”
Buyers get not only Trump’s unregulated tokens, which are nothing more than a piece of paper pledging ownership, but “equal voting power in governance decisions” and the ability to “propose changes, directly influencing platform development.”
“We’re leading a financial revolution by dismantling the stranglehold of traditional financial institutions and putting the power back where it belongs: in your hands,” says the site next to Trump’s photograph. “Owning WLFI tokens lets you shape the future of decentralized finance.”
Florida is among a number of states which have introduced legislation the investment of public funds in Bitcoin and other digital assets. Wyoming has perhaps taken the lead with its passage last year of the Stable Token Act, which allows a similarly named state commission to issue a virtual currency called Wyoming stable tokens ($WST) redeemable for $1 U.S. dollar.
If the Florida bills sponsored by Gruters and Barnaby pass as is, the new law regarding Bitcoin investments would take effect July 1.
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