The administration of Jersey City planned to invest part of its pension fund in crypto exchange-traded funds (ETF). A little earlier, the pension fund of the state of Wisconsin took a similar initiative.
Steven Fulop, Mayor of Jersey City, shared plans to invest the city’s pension fund in Bitcoin ETFs. According to the official, the pension fund is updating documents with the Securities and Exchange Commission (SEC) to get permission to expand its investment portfolio. The investments are expected to be placed by the end of the summer.
The mayor of Jersey City didn’t specify which Bitcoin ETF he plans to invest in or the specific amount of future investments. Though he said that the investment would be similar to the allocation made by Wisconsin’s state pension fund.
In late May 2024, the State of Wisconsin Investment Board (SWIB) disclosed investments in spot Bitcoin ETFs. The organization, which is responsible for managing assets in the state’s pension system, owns more than 2.4 million shares of BlackRock iShares Bitcoin Trust (IBIT) and over 1 million shares of Grayscale Bitcoin Trust (GBTC) worth about $100 million and $64 million, respectively. Investments amounted to 2% of the SWIB’s total AUM. The organization also owns shares of crypto companies Coinbase, MicroStrategy, and CleanSpark.
Pension funds beyond the United States are interested in crypto investments. In March 2024, the state pension fund of Japan (GPIF) started studying options for portfolio diversification, including through BTC. The GPIF is the world’s largest pension fund. Its AUM is ~$1.5 trillion.
The SEC’s approval of spot Bitcoin ETFs made it easier for institutional entities in the U.S. to access regulated investments in Bitcoin. However, major pension funds previously resorted to investing in digital assets and the crypto industry. In February 2019, it became known that two public pension funds from Fairfax County, Virginia, serving local police officers and county officials, invested $21 million in Morgan Creek Capital, an investment fund focused on blockchain and cryptocurrencies. Meanwhile, pension funds in the U.S. didn’t lose interest in digital assets regardless of market fluctuations, viewing them as a long-term investment.
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