Michigan’s Pension Fund Allocates $10M To Ethereum ETFs, Exceeding BTC ETF Holdings

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As a seasoned researcher with a keen interest in the intersection of traditional finance and digital assets, I find the recent investment moves by Michigan and Wisconsin’s pension funds intriguing. Having closely followed the evolution of these funds and their risk appetite, it’s fascinating to see Michigan taking the lead as the first state pension fund to invest significantly in Ethereum ETFs.

On Monday, it was disclosed that the State of Michigan made significant purchases of cryptocurrency ETFs, specifically those tied to Bitcoin and Ethereum, through a report submitted to the United States Securities and Exchange Commission (SEC).

Making this strategic decision signifies a substantial advancement in the realm of institutional investment in digital assets, considering that the Michigan Retirement System oversees roughly $144 million worth of pension fund assets for public employees.

Michigan Becomes First State Pension Fund To Invest In Ethereum ETF

In a recent disclosure, it was revealed that the Michigan Retirement System has invested approximately $6.9 million in the ARK/21Shares Bitcoin Exchange-Traded Fund (ETF), which amounts to roughly 110,000 shares of this particular fund.

Additionally, Michigan marked a trailblazing move by becoming the first state pension fund to purchase an ETF containing Ethereum, thereby expanding its cryptocurrency investment portfolio. Notably, Matthew Sigel, chief of digital asset research at VanEck, pointed out that Michigan now joins the top five holders of Ethereum and the Grayscale Ethereum Trust (ETHE).

Eric Balchunas, an ETF specialist at Bloomberg, pointed out that Michigan has invested more than ten million dollars in Ethereum ETFs, a figure greater than its investment in Bitcoin ETFs, demonstrating a larger commitment to the latter digital currency.

Instead, it’s worth noting that unlike some other states, Wisconsin’s investment board, overseeing a significant $156 billion for its pension scheme, has openly acknowledged ownership of Bitcoin ETF shares. Specifically, they hold assets like BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust.

The information you see is included in the regular 13F reports, which give an overview of institutional investors’ investment plans about 45 days after the end of each three-month period.

Spot Bitcoin ETFs Reach Six-Month High

The demand for spot Bitcoin ETFs has surged to a six-month high, signaling strong interest in Bitcoin as an investment vehicle. However, Ethereum ETFs have yet to replicate this success in the US market. 

In October, Bitcoin ETFs showed robust results, but they encountered difficulties as early as November 1, reporting a net outflow of approximately $54.9 million that day.

Approximately $25.64 million was drained from Fidelity’s FBTC account, making up almost half of the total outflow. Meanwhile, ARK and 21Shares’ ARKB fund also saw a significant decrease of around $24.13 million.

In simpler terms, the investment product from Grayscale called GBTC, which is often linked to money leaving the market, actually saw just $5.51 million leave during this period. This is a smaller amount than usual and suggests a potential slowing down or even a halt in the outflow trend compared to past patterns.

On November 1st, there was no movement in or out of BlackRock’s iShares Bitcoin Trust (IBIT), which follows a halt after 14 straight days of capital inflow. Just before this pause, IBIT saw a substantial influx of $872 million on October 30th.

Michigan’s Pension Fund Allocates $10M To Ethereum ETFs, Exceeding BTC ETF Holdings

Currently, as I’m typing this, the most significant cryptocurrency, Bitcoin, stands at a price of approximately $67,970. This represents a nearly 2% decrease in its value over the past day. In contrast, Ethereum has also experienced a drop, falling around 3%, with its current trading price being $2,407.

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2024-11-05 12:11