Wisconsin's pension program will significantly increase its investments in Bitcoin ETFs, according to David Krause, a finance professor at Marquette University in the US.
The state's pension program added two spot Bitcoin ETFs to its portfolio in the first quarter, marking the beginning of its foray into cryptocurrency investments.
The Wisconsin State Investment Board (SWIB) purchased shares of BlackRock's iShares Bitcoin Trust (IBIT) and Grayscale's Bitcoin Trust (GBTC) worth $164 million as of March 31, according to a filing with the U.S. Securities and Exchange Commission in May. .
The move surprised the industry, as large institutions, especially pensions, generally do not invest in junior ETFs such as spot Bitcoin ETFs. But the state's investment board has a history of being ahead of the curve, Krause noted in an interview with PBS Wisconsin:
“Wisconsin's board of investments has always been innovative. It's a fully funded retirement fund, so in a sense they have the luxury of being able to invest for the long term. “They don't have to worry about liquidity as much as, say, the Illinois state pension fund, which is only 50% funded.”
As of the end of 2023, SWIB was managing roughly $156 billion in assets, meaning its holdings in Bitcoin ETFs were a negligible roughly 0.1% of its portfolio. However, Krause believes that this investment is just a “start” and expects SWIB to increase this amount and other pension funds to follow suit:
“I think it's just an entry point. “I think they're testing whether the public will be resistant to owning this and using it as an experiment because it won't really significantly impact the portfolio until it gets to maybe a 1% or 2% position.”
*This is not investment advice.