Wisconsin’s pension fund made headlines in the first quarter by incorporating two spot Bitcoin (BTC) exchange-traded funds (ETFs) into its portfolio. This addition, valued at $164 million as of March 31, marks a significant step for institutional investments in crypto. The Wisconsin State Investment Board (SWIB) purchased shares of BlackRock’s iShares Bitcoin Trust (IBIT) and Grayscale’s Bitcoin Trust (GBTC), as revealed in a filing with the U.S. Securities and Exchange Commission in May.
The move raised eyebrows across the industry, given that large institutions, particularly pension funds, typically shy away from nascent ETFs like those focused on spot Bitcoin. However, according to David Krause, a finance professor at Marquette University in Milwaukee, this is likely just the beginning of Wisconsin’s foray into cryptocurrency. Krause noted in an interview with PBS Wisconsin that the SWIB has a history of innovative investments.
“Wisconsin’s investment board has always been ahead of the curve,” Krause said. “Being a fully funded pension fund, they have the luxury to invest with a long-term perspective without the same liquidity concerns plaguing underfunded pensions, such as Illinois’, which is only 50% funded.”
As of the end of 2023, the SWIB managed approximately $156 billion in assets, making its Bitcoin ETF holdings a modest 0.1% of its total portfolio. Despite the small percentage, Krause believes this initial investment is a strategic move to gauge public reaction and market performance. He anticipates that the SWIB will increase its Bitcoin holdings over time and expects other pension funds to follow their lead.