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Crypto Pensions Trending as Wisconsin Invests $160 Million into Bitcoin ETFs, Who Else is Buying?

Last Updated May 17, 2024 1:39 PM
Eddie Mitchell
Last Updated May 17, 2024 1:39 PM
Key Takeaways
  • Wisconsin’s pension fund is the first state-level pension to disclose Bitcoin ETF holdings.
  • Pension funds are an unlikely buyer of volatile assets, signaling confidence in Bitcoin’s long-term performance.
  • Approximately 1000 companies have invested in U.S. spot Bitcoin ETFs.

Wisconsin’s pension fund has added over $160 million worth of shares in two spot BTC exchange-traded funds (ETFs).

U.S. institutional investors were eagerly awaiting the green light on the approval of these new Bitcoin funds, as evidenced by the hundreds of companies invested in spot BTC ETFs. Now, the state pensions are getting in on the action.

State Pension Bags Bitcoin

As hedge funds and institutions of all sorts disclose their BTC ETF holdings with the U.S. Securities and Exchange Commission (SEC), a surprising investment has come from the state of Wisconsin.

Wisconsin’s state pension fund has disclosed a $160 million allocation into two of the new ETFs. This makes it the first state-level institution to publicly announce holdings in BTC ETFs. Senior ETF analyst at Bloomberg, Eric wrote :

“Wow, a state pension bought $IBIT in first quarter. Normally you don’t get these big fish institutions in the 13Fs for a year or so (when the ETF gets more liquidity) but as we’ve seen these are no ordinary launches. Good sign, expect more, as institutions tend to move in herds

As per the SEC filing  from the State of Wisconsin Investment Board (SWIB), the state pension  fund purchased just over $99 million of Blackrock’s iShares Bitcoin Trust (IBIT). In addition, it holds a further $64 million worth of the Grayscale Bitcoin Trust (GBTC).

The SWIB wrapped 2023 with over $155 billion in assets, with a vast majority ($132 billion) representing assets in the Wisconsin Retirement System. Speaking with Pensions & Investments magazine, Balchunas noted :

“Pensions are probably the hardest investor type to land,”

He describes them as being “very picky” as they have a lot of options, but typically take their time in making said acquisitions. Balchunas notes that institutional investors want highly liquid funds, and describes pension plans buying in as a “big win” for ETFs.

Pensions Love Bitcoin

Balchunas, recently highlighted how successful Bitcoin ETFs have been amongst major institutions. Considering their pace, volumes, and number of holders, the ETF analyst is pleasantly surprised.

The implication? Many more are likely to follow. According to Wisconsin Emeritus Associate Professor of Finance, David Krause, it’s a “big deal” for such a reputable pension fund like SWIB to be involved in Bitcoin ETFs. He told  Wisconsin Public Radio:

“I can assure you that most institutional money managers took note of this,”

SWIB’s investment may likely sway the minds of other pension funds who remain on the fence. It can give other pensions a boost of confidence when a well-regarded fund like the SWIB shows it is willing to dive into this new fund.

Long-Term Vision

This year’s wave of 13F filings, which are obligatory reporting standards for U.S. institutions managing over $100 million, have revealed just how big their appetite for crypto is.

Other 12F filings revealed that the likes of Susquehanna, a fund with over $575 billion in its portfolio, disclosed over $1 billion in GBTC holdings, as well as over $100 million across four others.

But the trend doesn’t stop there. Japan’s $1.5 trillion Government Pension Investment Fund (GPIF), the largest pension fund in the world, is also mulling the possibility of adding Bitcoin and other crypto assets to its portfolio.

Some of the wealthiest institutions in the world are pension funds, and they play a crucial role in the economy. By investing in a broad range of assets, spurring growth, and mobilizing savings, they’re able to provide income for retirees.

Pension funds tend to operate in the long term and follow a low-risk investment strategy. So, it goes without saying that their ongoing accumulation of Bitcoin and other cryptos is extremely bullish.

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