Wisconsin Pension Fund Invests $100M in BlackRock Bitcoin ETF

The State of Wisconsin Investment Board (SWIB) has taken a pioneering step in the institutional adoption of cryptocurrencies by investing nearly $100 million in BlackRock’s iShares Bitcoin Trust (IBIT). 

This move marks SWIB as the first state-level pension fund in the U.S. to declare its stake in spot Bitcoin ETFs, as revealed in their recent 13F filings with the Securities and Exchange Commission (SEC).

SWIB’s Crypto Investment Strategy

In the first quarter of the year, the Wisconsin Pension Fund not only invested in IBIT but also allocated over $63 million to Grayscale’s Bitcoin Trust (GBTC). Combined, these investments total more than $162 million, underlining the fund’s approach toward integrating digital assets into its diverse investment portfolio. The decision comes at a time when institutional interest in Bitcoin seems to be rising, as evident from the number of 13F filings disclosing holdings in Bitcoin ETFs.

Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, noted the unusual timing of such institutional entries into Bitcoin ETFs, which typically see such large-scale participation much later in their lifecycle. His observations on social media suggest a positive outlook on the institutional adoption of Bitcoin, anticipating a trend where other entities might follow SWIB’s lead.

Wow, a state pension bought $IBIT in first quarter. Normally you don't get these big fish institutions in the 13Fs for a year or so (when the ETF gets more liquidity) but as we've seen these are no ordinary launches. Good sign, expect more, as institutions tend to move in herds https://t.co/leKVe2CK1S

— Eric Balchunas (@EricBalchunas) May 14, 2024

Market Response and Institutional Trends

The news of Wisconsin’s substantial investment in Bitcoin ETFs influenced Bitcoin prices, which saw a modest increase of 1% following the announcement. However, this was set against a backdrop of a slight decline over the last 24 hours, attributed to unexpectedly high inflation data that emerged during the same period. The market dynamics underscore the influence major institutional moves can have on the volatile cryptocurrency market.

SWIB’s investment in Bitcoin represents a fraction of its total holdings, given that the full value of positions listed in its 13F filing amounts to $37.8 billion. Nonetheless, the allocation toward Bitcoin underscores a broader acceptance and normalization of cryptocurrencies within traditional investment frameworks. 

Market researcher MacroScope has pointed out the potential long-term relevance of this move, suggesting that SWIB’s position as a major holder of IBIT might prompt discussions among other state investment boards.