Calls for Louisiana state to buy Bitcoin after BlackRock divestment

by James · October 6, 2022

Bitcoin advocates have called on the Louisiana State Treasury to buy BTC following its announcement to sell about $794 million held with BlackRock.

Louisiana Treasurer John Schroder is reported to have written to BlackRock CEO Larry Fink, expressing his displeasure with the investment firm’s “vigilant” investment policy at the expense of the destruction of Louisiana’s economy.

The current investment policies are linked to environmental, social and governance (ESG) principles, which BlackRock has pushed for in what it calls “sustainable investment” standards.

At a recent annual meeting, however, it emerged that the firm is discontinuing ESG support based on shareholder recognition that such guidelines dictate the pace of the green transition without considering other factors.

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BlackRock under fire

ESG refers to criteria for assessing a company’s socially conscious behaviour. But given that the standards are arbitrary, with no standard way to measure compliance, critics have argued that ESG does little to encourage responsible corporate behavior.

Commenting on Tesla being dropped from the S&P 500 ESG index in May, Elon Musk called the move a fraud and a tool “weaponized by fake social justice warriors.”

Louisiana’s top industries are petroleum, natural gas extraction and chemical manufacturing.

Schroder wrote to Fink, commenting that he could no longer support a company that “would deny our state” the benefit of its assets.

With that, Schroder said withdrawing funds from the investment manager is necessary to reconcile the state’s best interests with BlackRock’s support for the ESG framework.

“This sale is necessary to protect Louisiana from actions and policies that would actively seek to inhibit our fossil fuel sector. In my opinion, your support for ESG investing is inconsistent with the best economic interests and values of Louisiana.”

Several US states, including Texas, Utah, Arkansas and West Virginia, have recently sold out of BlackRock due to similar concerns. However, Louisiana’s $794 million sale will be the main takeaway.

All of the states mentioned are “red states” or Republican strongholds.

Buy Bitcoin instead

Bitcoin proponents say that BTC is politically neutral, has no agenda, and is “real money” in the sense that it cannot be defaced.

In a chirping written by Will Hild, executive director of the consumer organization Consumers’ Research, on the matter, several commentators expressed support for Louisiana to channel sold funds into Bitcoin.

For example, Scott A. Wolfea manager at The Canadian Association of Community Health Centres, supported the idea of putting up to 5% of the disposed funds, $39.7 million, in Bitcoin.