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Jersey City Invests Pension Fund in Bitcoin ETFs Following Wisconsin’s Lead

Published July 26, 2024 11:22 AM

Published July 26, 2024 11:22 AM

By Teuta Franjkovic

Edited by Insha Zia

New Jersey crypto pension

Jersey City boldly moves into Bitcoin ETFs. | Credit: Pixabay

Key Takeaways

Mayor Steven Fulop has announced plans for Jersey City to invest in Bitcoin ETFs.
Jersey City’s initiative follows Wisconsin’s lead.
The SEC’s recent approval for the trading of spot Bitcoin ETFs has paved the way for public funds to explore such investments.

Jersey City Mayor Steven Fulop has revealed plans to invest part of the city’s pension fund into Bitcoin exchange-traded funds (ETFs).

This move aligns with the growing trend of municipal investment portfolios diversifying to include digital assets, as seen in the Wisconsin Pension Fund’s earlier investment in Bitcoin ETFs.

Jersey City’s Bold Move into Bitcoin ETFs

On July 25, Fulop announced via social media that Jersey City, New Jersey’s second-largest city, is updating its documentation with the U.S. Securities and Exchange Commission (SEC) to include Bitcoin ETFs.

Not my normal subject matter in a post but I’ll share anyway – the question on whether Crypto/Bitcoin is here to stay is largely over + crypto/Bitcoin won. The #JerseyCity pension fund is in process of updating paperwork to the SEC to allocate % of the fund to Bitcoin ETFs… https://t.co/5iNEqRqHGM

— Steven Fulop (@StevenFulop) July 25, 2024

Fulop, who has advocated for cryptocurrency and blockchain since his election in 2013, highlighted the success and potential of these technologies, comparing blockchain’s significance to that of the internet.

The mayor’s decision follows the SEC’s recent approvals of spot Bitcoin and Ethereum ETF listings on U.S. exchanges, which has cleared a key regulatory hurdle and effectively opened the door for public funds to explore investments in digital assets.

Fulop’s proactive approach suggests a growing recognition of digital assets’ potential. As Jersey City moves forward with the SEC paperwork, the implementation of Bitcoin ETFs in the pension fund is anticipated to be completed by the end of summer, setting a precedent for further municipal investment in cryptocurrencies.

JP Morgan and Wells Fargo now hold #Bitcoin . It is amazing to see Jamie Dimon pivot his views so quickly, just 6 months ago he wanted $BTC shut down

I guess you know what they say… If you can't beat them, join them 🍻 pic.twitter.com/M08KvDysx3

— ᙢinus ᙡells (@MinusWells) May 12, 2024

Bitcoin and Public Pension Funds: A New Investment Strategy

Earlier this year, Anthony Pompliano highlighted the impressive returns on Bitcoin investments made by public pension funds at a conference on economics and American leadership.

He pointed out that early adopters like the Fairfax County Police Officers and Employees Retirement Systems, which invested in a blockchain-dedicated fund between 2018 and 2019, have seen their returns increase more than ten times thanks to Bitcoin.

This discussion emphasized the significant potential for digital assets to enhance the financial stability of pension funds facing substantial unfunded liabilities.

The First Public Pension Funds To Allocate To Bitcoin Are Up 10x Now

I spoke this weekend at a conference focused on the intersection of economics and American leadership.

Those two topics rarely go together. Economics is reserved for the nerds and politics is reserved for the… pic.twitter.com/wh3tRbUuwo

— Anthony Pompliano 🌪 (@APompliano) March 4, 2024

Pompliano argued that if more state pension funds had taken a minimal 1% position in Bitcoin when he first recommended it, the number of fully funded state pension plans could have increased dramatically.

Despite past performance not being indicative of future results, he remains optimistic about Bitcoin’s continued strong performance based on its market fundamentals and the imbalance of supply and demand.

With Bitcoin ETFs now up and running, Pompliano believes that the under-allocation of digital assets in public pensions could soon change, potentially securing better financial outcomes for millions of Americans reliant on these funds for retirement.

Arizona Senate Explores Bitcoin ETF Investments for State Pension

In March, the Arizona state Senate advanced a resolution that had lawmakers and state retirement fund managers consider allocating a portion of their portfolios to Bitcoin ETFs.

The resolution aimed to encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to monitor these new investment vehicles and potentially add exposure, as detailed in a fact sheet.

The state Senate passed the resolution in a 16-13 vote. The voting followed party lines, with all Democrats opposing the measure. The resolution was then sent to the state House Ways and Means Committee for further consideration.

Republican state Senator Wendy Rogers, who had previously led an initiative in 2022 to make Bitcoin legal tender in Arizona, voted in favor of the resolution. However, Rogers’ 2022 bill did not advance to committee markup.

Japan’s GPIF and Other Pension Funds Explore Bitcoin

Beyond the U.S., Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, also revealed it was exploring the inclusion of “illiquidity assets” like Bitcoin in its investment strategy.

This came as part of its broader research into diversifying its portfolio beyond traditional investments such as bonds, stocks, and real estate to include assets like forests, farmland, and gold. Despite the growing interest, GPIF clarified that there was no immediate plan to invest in Bitcoin or other cryptocurrencies.

This development aligns with a cautious yet growing interest in cryptocurrencies among global pension funds. For instance, despite the inherent volatility associated with digital currencies, South Korea’s National Pension Service had previously invested in Coinbase shares, indicating a measured approach to crypto.

Additionally, a proposed law in Japan in February aimed to allow investment funds to hold digital assets, signaling a potential shift in regulatory and investment landscapes for cryptocurrencies within institutional finance frameworks.

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About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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