(The Center Square) – California’s main public pension fund, CalPERS, has more than doubled its shares in a highly leveraged, Bitcoin-related stock in the last two years that recently plunged by nearly half, The Center Square found.

The state public pension held nearly $144 million worth of Strategy Inc., formerly known as MicroStrategy, as of its latest SEC filing.

Strategy Inc. shares have since fallen from $322.21 per share since CalPERS’ Sept. 30 SEC filing to $171.42 per share, a decline of 44% as of the Dec. 2 market close.

Even though CalPERS manages $589.5 billion in assets, it is only able to fund 82% of expected liabilities, leaving the fund with an over $100 billion pension deficit that is backstopped by taxpayers. Public finance experts warn that this funding shortfall leaves little room for the volatility of cryptocurrency-related investments.

“Leveraged bitcoin companies are highly speculative investments and they simply aren’t appropriate for pension money, regardless of the size” Marc Joffe, a public finance expert and visiting fellow at the California Policy Center, said in an interview with The Center Square.

CalPERS responded by noting its investment in Strategy Inc. is just one of thousands of the publicly traded equities it has exposure to and pointed to its strong overall returns in publicly traded investments. 

“CalPERS uses an index-oriented approach to invest in the totality of the public equities market. Our fund performance cannot be judged by the performance of a single stock among many thousands of equities,” wrote CalPERS spokesperson Abram Arredondo to The Center Square. “Our public equity portfolio returned 16.8 percent in fiscal year 2024-25 – the highest among all our asset classes.”

Strategy Inc. historically was a software company, but in August 2020 announced it would start purchasing large quantities of Bitcoin. It has since used a variety of financing mechanisms to become the largest holder of Bitcoin after the anonymous creator of the cryptocurrency, and the Bitcoin exchanges that hold individuals’ Bitcoins in trust. 

Because Strategy Inc. uses leverage, including debt, to purchase extra Bitcoin, its share price swings higher and lower than Bitcoin itself, resulting in Bitcoin’s moderate slump driving Strategy far lower. It’s unclear what could happen to the broader Bitcoin market if Strategy Inc., as one of the largest buyers of Bitcoin, were to stop purchasing Bitcoin and, for the first time, unwind some of its holdings — as referenced by the company’s CEOs amid its stock plunge. 

“CalPERS could get lucky — bitcoin has rebounded many, many times from sharp declines, and it could again … but should pensioner money, which ultimately has to be backed up by taxpayers, be speculated on something like that?” Joffe said. 

Earlier investigations by The Center Square have revealed CalPERS’ major losses in green energy technology investments, and major capital commitments to a Chinese venture capital fund investigated by Congress for ties to the Chinese Communist Party and human rights abuses.

Strategy Inc. did not respond to a media inquiry by the time of publication.