Abstract：Data indicates net inflows into BTC ETFs have resumed. Inclusion of BTC ETFs in U.S. pension fund portfolios could drive significant capital inflows, boosting BTC prices.

According to Sosovalue data, Bitcoin ETF has experienced net inflows for five consecutive days, with a total inflow amount reaching $948.32 million. This is the third time since mid-March that there have been net inflows for four consecutive days.By comparing the BTC price trends, it can be observed that the price movements of Bitcoin show a strong correlation with the total net inflow of the Bitcoin ETF.As the largest Bitcoin spot ETF currently, Grayscale's $GBTC has seen a gradual reduction in outflows. Recently, it has even experienced net inflows for three consecutive days, a situation that has never occurred before.

The high management fees are the main reason for the continuous outflows from GBTC. Compared to competitors who charge 0.25% or less, Grayscale's fee of 1.5% is significantly more expensive.The net asset value of $IBIT, issued by BlackRock, has reached $18.51 billion, closely approaching Grayscale's $19.4 billion.

U.S. National Pension Fund Begins Purchasing ETFs

In documents submitted to the U.S. Securities and Exchange Commission this week, the Wisconsin Investment Board (SWIB) reported investments by BlackRock and Grayscale in spot Bitcoin ETFs.

According to SWIB's 13F filing for the first quarter of 2024, this $156 billion pension fund purchased $64 million worth of Grayscale's GBTC and $99.2 million worth of BlackRock's IBIT, bringing the total Bitcoin investment slightly over $163 million.

The filing indicates that cryptocurrency investments are available for the Wisconsin retirement system.

Macroeconomic analyst "Macro Scope" suggests that since BTC investments can now be easily accessed through regulatory-approved spot ETFs, other states are likely to follow suit.

Why Is This News Significant?

In simple terms, the U.S. pension system holds a substantial amount of funds. If Bitcoin ETFs are included in pension asset allocations, there will be a significant influx of funds, driving up BTC prices.

The U.S. pension system primarily consists of the following components:

  1. Social Security: Managed by the federal government, covering almost all American workers. Funding comes from payroll taxes (FICA taxes).

  2. Employer-sponsored pension plans: Including 401(k), 403(b), 457 plans, provided by employers, where employees can choose to participate and make voluntary contributions.

  3. Individual Retirement Accounts (IRAs): Individuals can establish and contribute to these accounts voluntarily, divided into traditional IRAs and Roth IRAs.

Asset Holdings:

According to data, the U.S. pension system holds a massive amount of funds. Here are some approximate statistics:

  1. Social Security trust funds: Approximately $2.9 trillion.

  2. 401(k) plans and other employer-sponsored pension plans: Approximately $6.7 trillion.

  3. Individual Retirement Accounts (IRAs): Approximately $11 trillion.

Investment Assets:

Pensions typically invest in a variety of assets to diversify risk and achieve long-term growth. Common investment assets include:

  1. Stocks: U.S. and international stocks.

  2. Bonds: Government bonds, corporate bonds, etc.

  3. Real Estate: Real Estate Investment Trusts (REITs), etc.

  4. Alternative Investments: Private equity, hedge funds, commodities, etc.

  5. Cash and Cash Equivalents: Short-term Treasury securities, money market funds, etc.

Data or Table

Here is a simplified table showing the asset distribution for different types of pension plans (values are approximate):

Potential Inflows of BTC ETF

If Bitcoin ETFs, such as the BlackRock Spot Bitcoin ETF IBIT, were to be included in pension asset allocations, the potential inflow of funds would depend on various factors, including managers' risk preferences, investment strategies, and regulatory environment.

Assuming a pension plan decides to allocate 1% of its assets to Bitcoin ETFs, below are the potential inflows:

  • Social Security Trust Funds: Due to its primary investment in low-risk assets, the likelihood is relatively small.

  • 401(k) Plans: A 1% allocation could potentially bring about $670 billion in fund inflows.

  • IRAs: A 1% allocation could potentially bring about $1.1 trillion in fund inflows.

The approval of BTC spot ETFs is considered the main driving force behind the recent rise in BTC prices. According to statistical data, BTC ETFs have brought in a net inflow of $12.63 billion. Consequently, it is noteworthy that U.S. national pension funds have started to allocate Bitcoin ETFs in their portfolios.

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