Early 2024 Saw a Bold Move
The Wisconsin State Investment Board (SWIB) garnered significant attention in the first quarter of 2024 for incorporating two spot Bitcoin exchange-traded funds (ETFs) into its investment portfolio. This decision, valued at roughly $164 million by the end of March, signifies a major development for institutional involvement in the cryptocurrency market.
Details of the Investment
A filing submitted with the U.S. Securities and Exchange Commission in May revealed that the SWIB had acquired shares in both BlackRock’s iShares Bitcoin Trust (IBIT) and Grayscale’s Bitcoin Trust (GBTC). Notably, this move surprised many within the financial industry, as large institutions, particularly pension funds, traditionally avoid new ETFs, such as those focused on spot Bitcoin.
Potential for Further Investment
David Krause, a finance professor at Marquette University in Milwaukee, suggests that this might be the initial step in Wisconsin’s exploration of the cryptocurrency landscape. Krause, in an interview with PBS Wisconsin, highlighted the SWIB’s history of embracing innovative investment strategies.
Unique Position for Innovation
“The Wisconsin investment board has consistently demonstrated a forward-thinking approach,” Krause explained. “Their status as a fully funded pension fund grants them the flexibility to make long-term investments without facing the same liquidity challenges encountered by underfunded pensions, such as Illinois’, which currently sits at only 50% funded.”
A Measured Approach
As of the close of 2023, the SWIB managed a substantial portfolio valued at approximately $156 billion. Therefore, the Bitcoin ETF holdings represent a modest 0.1% of the total assets. Despite the seemingly small percentage, Krause views this initial investment as a strategic maneuver to assess public response and market behavior. He anticipates that the SWIB will gradually increase its holdings in Bitcoin and expects other pension funds to follow suit.
