State Pension Funds Embrace Bitcoin ETFs
Since the approval of Bitcoin ETFs by the SEC this year, institutional investors have shown interest in this new avenue. States in the US are now following suit, with Wisconsin being the trailblazer in allocating part of its pension fund to Bitcoin ETFs. Jersey City and Michigan have also joined this trend, showing a growing acceptance of cryptocurrency investments.
Wisconsin Sets the Trend
- Wisconsin allocates approximately $98.6 million, or 2% of its pension fund, to BlackRock’s iShares Bitcoin Trust ETF in May 2023.
Jersey City Joins the Movement
- Jersey City updates its SEC paperwork to allow pension fund investments in Bitcoin ETFs, following Wisconsin’s lead.
Michigan Enters the Crypto Space
- Michigan files with the SEC owning $6.6 million worth of shares in the ARK Bitcoin ETF by Ark Invest, marking its entry into the Bitcoin ETF market.
These developments underline the increasing interest in Bitcoin ETFs among institutional investors, with total assets under management in this sector surpassing $17 billion, overshadowing traditional tech-based ETFs.
Bitcoin Price Recovery Boosted By Spot ETFs
Despite a recent price dip to $53,500, Bitcoin has seen a steady rebound in the past two weeks, fueled by spot Bitcoin ETFs rather than new investor inflows. A report by CryptoQuant suggests that the current bull cycle differs from past cycles in terms of investor behavior.
Market Dynamics Shift
- Previous bull cycles exhibited a peak in Bitcoin price with increased new investor inflows, driven by FOMO.
- The current cycle, however, shows a temporary spike in new inflows in the first quarter, indicating a different pattern from historical trends.
This shift suggests that Bitcoin’s recent price resurgence is driven more by spot Bitcoin ETF investments rather than fresh investor participation. While spot ETFs have propped up the price, sustained growth will require renewed interest from new investors.
Bitcoin was trading at $67,530 at the time of writing, marking a nearly 5% increase in the past 24 hours.
Hot Take: Embracing Bitcoin ETFs for Institutional Growth
The growing acceptance of Bitcoin ETFs by state pension funds indicates a broader institutional shift towards cryptocurrency investments. While spot ETFs have supported Bitcoin’s price recovery, the sustainability of this growth hinges on attracting new investors to the market.
Sources:
– Bitcoinist
– SEC Filing
– CryptoQuant Report
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