Eleven U.S. state pension funds are collectively facing approximately $337 million in paper losses on their investments in MicroStrategy (MSTR) stock, with ten of the funds down roughly 60% on their positions, according to research from Fintel and a DL News investigation. The funds initially held nearly 1.8 million shares worth about $577 million, which have now depreciated to a value of around $240 million.
The losses are a direct result of MicroStrategy's stock performance, which has fallen 67% over the past six months. The company, led by CEO Michael Saylor, pioneered a corporate strategy of using debt and equity to acquire Bitcoin, effectively turning its stock into a leveraged bet on the cryptocurrency's price. This strategy, widely emulated by other companies in 2024 and 2025, amplified gains during bull markets but has now magnified losses as Bitcoin's price has languished.
The affected pension funds manage the retirement assets for millions of public employees, including teachers, police officers, and firefighters. The New York State Common Retirement Fund, one of the largest with about $280 billion in assets, has suffered an estimated $53 million loss (close to 60%) on its MicroStrategy stake. Other major funds impacted include the Florida Retirement System (approx. $46 million loss), the State of Wisconsin Investment Board (approx. $26 million loss), and the Treasurer of the State of North Carolina (approx. $30 million loss).
Financial and legal experts have raised concerns about fiduciary duty. "Public pension funds operate under a strict fiduciary duty to act prudently," said Dr. Sarah Chen, a professor of pension law at Stanford University. "The scale and nature of this exposure to a single, hyper-volatile stock raises serious questions about due diligence and risk management frameworks."
The situation highlights the risks of volatile cryptocurrency-linked equities entering conservative public portfolios and is likely to trigger increased regulatory scrutiny from state auditors and legislators. Pension boards may face pressure to implement stricter limits on single-stock positions and enhance stress-testing for volatile assets.
