The State of Michigan Retirement System, which manages $143.9 million in pension assets for state employees, has made a significant investment in cryptocurrency. According to a recent regulatory filing, the pension fund has invested $6.6 million in the ARK 21Shares Bitcoin ETF. This marks a notable step as the second confirmed instance of a state pension fund investing in a bitcoin exchange-traded fund (ETF).
This move follows a similar decision by the Wisconsin Retirement System, which manages $156 billion in assets. In May, Wisconsin’s investment board disclosed holdings in BlackRock’s iShares Bitcoin Trust and the Grayscale Bitcoin Trust, valued at $99 million and $63 million respectively as of March.
These investments highlight a growing trend among traditional institutional investors showing interest in cryptocurrency assets. Over the past six months, bitcoin ETFs have attracted $32 billion, largely from retail investors. Analysts, however, are keenly observing the involvement of institutional investors like the Michigan pension fund, which may signal a shift in the market.
Todd Sohn, an ETF analyst at Strategas, noted that institutions investing in these funds typically have a longer-term perspective. This could potentially stabilize the market, which is often characterized by extreme volatility.
In a related development, the mayor of Jersey City, New Jersey, announced plans to allocate city funds to bitcoin ETFs, although specific details and a timeline were not provided.
The State of Michigan Retirement System has not commented on the investment. This strategic move indicates a cautious yet growing acceptance of cryptocurrencies among institutional investors, potentially paving the way for more widespread adoption.
