Analysts Weigh in on Wisconsin Pension Fund’s $160 Million Bitcoin ETF Strategy

In this post:

  • Wisconsin Pension Fund gains significant Bitcoin exposure.
  • Analysts say the fund’s investment proves that Bitcoin is gaining traction among institutional investors as a viable asset class.
  • Institutional interest in Bitcoin has risen significantly following the launch of spot ETFs.

The Wisconsin Pension Fund has gained significant Bitcoin exposure following its recent addition of spot BTC exchange-traded funds (ETFs) to its holdings. The decision of the pension fund to embrace BTC this early into the adoption of ETFs comes as a shock to market analysts.

Also Read: BlackRock expects spot Bitcoin trading by sovereign funds and pensions

According to a recent Securities and Exchange Commission (SEC) filing, the acquisition diversifies the fund’s investment asset class. In the first quarter, the fund purchased approximately $100 million of BlackRock’s iShares spot Bitcoin ETF and more than $60 million of Grayscale’s Bitcoin fund.

Analysts React to Wisconsin’s Move

Reacting to the acquisition, David Krause, an associate professor of finance at Marquette University, described it as a shock because the investment industry did not expect a major pension fund like Wisconsin to embrace BTC very early into its ETF adoption. 

The professor explained that there is a clear distinction between purchasing the flagship digital asset directly and buying shares of a Bitcoin ETF. According to him, investors can store the BTC they buy directly in a crypto wallet, but Bitcoin ETFs function more like mutual funds as investors only trade shares linked to the digital asset.

Meanwhile, Krause noted that Bitcoin’s volatility might not be a major issue as a lot of assets have volatility. Regardless, he noted that the fund’s BTC investment is minimal compared to the fund itself. 

“It’s 1/10 of 1%. Now $180 million is not pocket change. But this is a $180 billion fund. I think it’s just an entry point. I think they’re testing to see the reaction of the public to whether or not there’s resistance to owning this.”

David Krause 

Krause added that the investment can be described as a trial run, which may not affect the portfolio unless increased. Echoing his sentiments, MicroStrategy CEO, Michael Saylor, said that the move shows that “fiscally sound pension funds see the value of Bitcoin.”

Institutional Bitcoin Adoption Continues To Grow

Meanwhile, the Wisconsin Pension Fund’s move comes amid increasing institutional exposure to the emerging industry, following the spot Bitcoin ETF launch in January.

Also Read: Spot Bitcoin ETFs Finally Revive, See $1.4B Weekly Inflows

Recent SEC filings show that several US financial institutions, such as JP Morgan Chase and Wells Fargo, have substantial exposure to the asset class. Besides that, more than 52% of the top 25 US hedge funds have ventured into the sector, with Millenium Management investing around $2 billion in several BTC ETF funds.

Hedge funds Bitcoin investment.
Hedge funds Bitcoin investment. Source: X/Luke Mikic

Outside of the US,  Japan’s Government Pension Investment Fund (GPIF) announced it was considering investment diversification, including possible BTC investment. A recent KPMG survey also suggests that crypto assets are seeing increasing institutional adoption in Canada.

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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