The Wisconsin State Retirement Fund currently holds approximately $160 million in Bitcoin spot ETFs (IBIT, GBTC). Finance professor David Krause said in an interview that in fact, stocks and other alternative investments have high volatility, while Bitcoin has changed a lot, and its ability to resist inflation has not yet been fully recognized.
Wisconsin pension fund buys $160 million in Bitcoin
The Wisconsin pension fund has allocated 0.1% of its $156 billion in assets to Bitcoin spot ETFs, with about $160 million invested in BlackRock's iShares Bitcoin Trust (IBIT) and Grayscale (GBTC), according to SEC filings.
Wisconsin’s state pension funds are among the most financially sound in the country, ranking fifth in the nation in terms of funding ratios, according to a January report by the Equiable Institute.
U.S. Pension Fund Capital Ratio Ranking Bitcoin has high returns and hedging functions, and U.S. states can follow suit
David Krause, an emeritus professor at Marquette University in Wisconsin, said in a recent interview with PBS that states in the United States can try to follow Wisconsin's lead in investing in Bitcoin spot ETFs.
Don’t worry about capital liquidity
He noted that the Wisconsin State Investment Board (SWIB) has been innovative, has the ability to invest for the long term, and does not need to worry about illiquidity issues like the Illinois Retirement Fund.
Despite his optimism, David Krause believes that only specific state funds will be able to withstand crypto market cycles and volatility:
I don't think people who don't have enough money can afford it (investing in Bitcoin) because it's a long process.
David Krause didn't predict which states would be most likely to invest. Data reported by Equable shows that by 2023, only seven state pension funds will have a share of funding greater than or equal to 95% of Wisconsin's, while the Illinois State Pension Board's share of funding At least, the funding ratio is 51%.
Don’t worry about high Bitcoin volatility
David Krause called Bitcoin a "good investment" for state pension funds, highlighting its role in diversification, high potential returns and as a hedge against inflation.
Asked if he should be worried about Bitcoin’s high volatility, he retorted:
A lot of assets are volatile, and if you really dig into a portfolio, you'll find that a lot of assets, including stocks and some other alternative investments, are fundamentally very volatile. Bitcoin has changed a lot, supply and demand have begun to balance, and I do think the investment community has begun to understand it more and regard it as a viable alternative investment, and Bitcoin's ability to resist inflation has not yet been fully recognized.
Will Wisconsin buy more Bitcoin?
People from all walks of life were "surprised" that retirement funds invested in the Bitcoin ETF so soon after its launch, instead of investing years later as expected. David Krause called SWIB's initial investment a "soft launch," saying:
I think this is just an entry point and they (SWIB) are testing the public response to see if there is resistance to owning this product and it actually won't have a significant impact on the portfolio until the position reaches 2% of the portfolio.
Fintel data shows that SWIB is now one of the top Bitcoin ETF investors. As of June 3, it ranked sixth in IBIT holdings and 13th in GBTC holdings.
SWIB IBIT ranks sixth in holdings
This article U.S. pension funds bought hundreds of millions of dollars in Bitcoin ETFs, and scholars: Expect U.S. states to follow suit. First appeared on Chain News ABMedia.
