Retirement funds are built to be boring. That isn’t a flaw, it’s the point. They move as slowly as their beneficiaries, avoid surprises, and make the future feel manageable.
On the other hand, crypto was built for the exact opposite. Because of this, it is often seen as too immature for pension money.
This framing assumes that stability comes before participation. But, what if it works the other way around?
The case against crypto, as pensions see it
Pension funds manage calendars, rather than money in the abstract. Salaries stop, pensions don’t. Assets that can drop in the double-digits as fast as you can say “crypto!” are difficult to square with that responsibility.
Bitcoin, for all its growing legitimacy, still moves too much. In 2025 alone, it slid from near $120k to around $80k. This is a decline large enough to be called a “cycle” in crypto terms. However, this is a big problem in pension math.
Crypto maxis know that this isn’t an outlier. Similar drops have been seen in the past too.
Source: TradingView
Price, though, is only part of the discomfort.
Regulation remains uneven and often political, changing with court rulings and administrations. Custody has improved, but the industry hasn’t yet forgotten its own history. Exchange failures, frozen withdrawals, and creative accounting are still fresh in the mind, and even the rulebook is still being written.
And then, there’s fiduciary duty. Pension managers are paid to avoid permanent loss, rather than explain it. By that measure, crypto still fails various tests.
Big money and its FOMO patterns
History has a way of taming assets that begin as inconvenient, volatile, and deeply unserious. This usually happens once large pools of patient capital decide it’s time to stop watching.
Equities were the first. In the early 1900s, stock markets were thin, chaotic, and lightly regulated. Then, supervision changed everything. Pensions, insurers, and mutual funds arrived with scale, long time horizons, and a no-nonsense attitude. Disclosure standards followed. Audits became normal.
The markets, eventually, behaved.
When asked about the possibilities for crypto, Neil Stanton, CEO and co-founder of Superset told AMBCrypto,
However, he noted that it is not without its kinks.
Stanton noted that once BlackRock could change the risk profile, it had “the confidence to create an institutional product.” With this, the institution helped exchanges stop manipulation, making the asset reflect the true market.
The CFA Institute has since put numbers to the pattern. Higher institutional ownership tends to bring better governance and greater stability over time.
As it turns out, order in finance is… well, contagious.
Property had its own makeover. Before institutional capital, real estate investing was local, illiquid, and occasionally opaque. Then came REITs (now a roughly $2 trillion global market) designed to translate bricks and rent into something we could actually live with. Municipal bonds followed a similar path as well.
The capital arrived before the credibility. Crypto, for better or worse, may just be earlier in that same cycle.
“Boring” money does interesting things
There is a particular kind of money that has no interest in being right quickly. Pension money arrives with time, and time has a way of changing rooms. Money that isn’t rushed makes markets quieter. Leverage looks less clever. What’s left is the work.
The liquidity changes as well. Pension balance sheets aren’t dependent on cheap funding that vanishes under stress. They move slowly, if at all. With crypto, the instability will always remain but the extremes become less sharp.
Even when pensions participate, they would do so carefully. Even a 1-2% crypto allocation would be diversified across assets, strategies, and risk buckets. That spreads exposure and reduces the maddening effects of the violent inflow-outflow cycles.
And then, there are expectations. Audits. Custody. Risk frameworks. Habits carried over from more mature markets. Over time, those habits become standards, and the standards rearrange incentives.
Regulation ALWAYS follows the money…
…and crypto is starting to see that now. Through infrastructure and scale.
Source: downing.house.gov
In the United States, this becomes clear if you look at ETFs and retirement frameworks.
Since President Trump’s re-election, Washington has moved towards a more permissive stance on digital assets. This includes an executive order aimed at better access to crypto and other alternatives inside retirement plans.
Source: SoSoValue
The result has been a surge in regulated exposure. Bitcoin [BTC] and Ethereum ETFs have pulled in roughly $30 billion in net inflows YTD at the time of writing, led by products like BlackRock’s iShares Bitcoin Trust.
Source: SoSoValue
Remember, none of these are fringe instruments. This matters because ETFs drag regulation with them. Court rulings, SEC approvals, custody rules, disclosure standards… none of these arrived because crypto asked nicely.
Industry groups have been explicit too. Demand is strong, and the regulatory environment is adapting to meet it. Once pension systems, sovereign funds, and retirement plans engage (even cautiously), crypto becomes too systemically relevant to remain vague.
None of this makes crypto a safe asset!
For many pension systems, especially underfunded ones, instability is an existential concern.
In the U.S, large public pension plans are 86.3% funded as of November 2025, per data from Milliman. This is a sign of sustained improvement; stronger balance sheets, but not unlimited risk tolerance.
Source: Milliman
Funds in that position simply do not have the luxury of absorbing big losses, no matter how compelling the long-term story is.
Political risk hasn’t vanished either. Crypto regulations remain uneven across jurisdictions and borders, vulnerable to election cycles, court challenges, and sudden policy reversals. Even within the same country, there could be conflict. A more crypto-friendly posture at the higher level doesn’t automatically translate into support at the state or municipal level.
Case in point – Key stakeholders continue to oppose New York mayor-elect Zohran Mamdani over his skepticism of crypto. His non-acceptance comes even with U.S policy growing more supportive after President Trump’s re-election.
Then, there are the unresolved weaknesses. Fraud has not disappeared. Governance failures still surface. Custody infrastructure, while improving, is not foolproof. Even regulators acknowledge that oversight standards across exchanges and intermediaries remain inconsistent.
So, no. This is not an argument that crypto is suddenly prudent. It is still risky.
The difference is that it is no longer uniquely risky.
The scale is easy to forget
Global pensions and retirement assets now run into the tens of trillions of dollars, spread across public funds, private plans, and sovereign systems. Against that backdrop, a 1-2% allocation to crypto is a rounding decision. And yet, even that small slice would matter, because that would change who the market is built for.
Long-term retirement capital needs structure and rules that last. When it shows up, markets adjust. So, the real question is not whether pensions should take the leap with crypto.
It is whether crypto ever truly grows up without them.
Final Thoughts
- Even a 1-2% allocation of pension money in crypto can change markets and force stronger standards.
- Institutional adoption is key to crypto maturity.
Source: https://ambcrypto.com/just-1-2-heres-how-retirement-funds-can-change-crypto-forever/
