ETFs
More US states should follow Wisconsin’s lead by investing in spot Bitcoin ETFs
David Krause, professor emeritus at Marquette University, told PBS Wisconsin on May 31st that other US states could follow Wisconsin in investing in cash Bitcoin AND F.
Krause called Bitcoin a “good investment” for public pension funds, highlighting its role in diversification, its potential for high returns and its use as a hedge against inflation. He added that Bitcoin’s ability to eliminate volatility in government actions is underestimated.
Despite his optimism, Krause clarified that only the State of Wisconsin Investment Board (SWIB) and certain other public funds can afford to withstand the cycles and volatility of the crypto market.
He said:
“I don’t expect those who are underfunded to be able to afford [invest] because it’s a long piece.
Krauss did not predict which states would be most likely to invest. However, Equable data indicates that seven state pension funds had a funded ratio greater than or equal to 95% in Wisconsin in 2023. Three of the seven funds had overfunding ratios greater than 100%.
Conversely, Illinois had the least funded state pension, with a funded rate of 51 percent.
Wisconsin could invest more
Krause also raised the possibility of strengthening Wisconsin’s position. He called SWIB’s initial investment a “test”, saying:
“I think it’s just an entry point. I think they’re doing some testing to see the public reaction as to whether or not there’s any resistance to appropriating this.
Krause highlighted the rapid nature of Wisconsin’s investment by saying the investment industry was “astonished” that a pension fund invested in spot Bitcoin ETFs so soon after launching the products, unlike years after launch as planned.
SWIB holds over $160 million in spot Bitcoin ETF shares, comprised of Black Rock I BITE And Shades of grey GBTC. Krause estimated the investment represents 0.1% of SWIB’s total $180 billion value, although the latest filing indicates the fund’s value is less than $37.9 billion.
According to Fintel data, SWIB is currently among the top investors in Bitcoin ETFs. As of June 3, it held the sixth largest IBIT position and the 13th largest GBTC position.
The company first disclosed its investments on May 14.