In a recent regulatory filing, the State of Michigan’s Retirement System made a landmark decision to invest in cryptocurrencies. The pension fund, overseeing approximately $143.9 billion in assets and meant for state employees, has committed $6.6 million to the ARK 21Shares Bitcoin ETF.
Since their January launch, this investment marks only the second confirmed instance of a pension fund investing in Spot Bitcoin ETFs. This move is indicative of traditional institutional investors’ growing acceptance of crypto assets and may open the door for wider adoption.Towards the end of March, Wisconsin’s retirement system disclosed its investment in BlackRock’s iShares Bitcoin Trust worth $99 million and in Grayscale Bitcoin Trust , valued at $63 million.
Retail investors have accounted for most of the $32 billion that have flowed into the nine newly-born Bitcoin ETFs in the last 6 months. However, according to VettaFi, some analysts are looking out for any changes in demand levels by institutions like Michigan’s state pension fund.that the city’s pension fund will invest 2% in Bitcoin ETFs, though no specific timeline was provided for this allocation.The trend of pension funds investing in crypto is rising, although it’s not without risks.
There have been cases where pension funds suffered huge losses with their cryptocurrency investments. An example is the case of Montreal-based pension fund CDPQ. The firm faced significant losses after its investment in Celsius went south following the firm’s bankruptcy filing back in 2022.The increasing exposure of institutional investors to cryptocurrencies may cause significant shifts in the pension fund investing landscape.