Wisconsin Pension Plan Likely to Invest Much More in Bitcoin ETF, Marquette Professor Says

As an analyst with a background in finance and experience in following the investment trends of pension funds, I believe that Wisconsin’s State Investment Board (SWIB) taking a trial phase into investing in spot bitcoin ETFs is a strategic move. With a fully funded pension fund, SWIB has the luxury to invest for the long term and explore new opportunities, including crypto assets.

As a researcher, I would express it this way: The recent inclusion of two Bitcoin ETFs in Wisconsin’s pension plan portfolio marks a likely first step for this U.S. state in expanding its crypto investments, according to my assessment as a finance professor at Milwaukee’s Marquette University.

In a surprising turn of events for the industry, the state’s bold investment board made headlines by defying the norm and investing in young Exchange-Traded Funds (ETFs) focusing on bitcoin. Typically, large institutions such as pensions avoid these unconventional investments. However, Krause highlighted in an interview with PBS Wisconsin that this forward-thinking board has a history of being ahead of the curve.

“The investment board in Wisconsin has a reputation for being forward-thinking,” he commented. “Being a fully-funded pension fund allows them to focus more on long-term investments without worrying as much about maintaining liquidity, unlike the Illinois pension fund, which is only at 50% of its required level.”

At the close of 2023, I, as a crypto investor, observed that the SWIB (Swiss National Bank) managed approximately $156 billion worth of assets based on their website data. This implies that the value of their bitcoin ETF holdings was insignificant, around 0.1% of their total portfolio.

Krause stated that the investment was merely an initial step, implying that SWIB would likely contribute more, with other pension funds eventually doing the same.

As a crypto investor, I believe this is merely an opportunity for entry into the market. These companies might be gauging public response before fully committing, using it as a sort of test run. The impact on my portfolio would be negligible until I reach a significant holding of around 1% to 2%.

Approximately 500 institutional investors disclosed their investments in spot bitcoin ETFs during the first quarter of the year. The largest holder as of March 31 was hedge fund Millennium Management, reporting over $2 billion in holdings spread across various funds, equating to around 3% of its total managed assets.