The State of Michigan Retirement System has made a significant leap into the world of cryptocurrency by investing in a spot Bitcoin exchange-traded fund (ETF) offered by ARK 21Shares.
According to a recent filing with the United States Securities and Exchange Commission (SEC), Michigan’s state pension fund has acquired 110,000 shares of the ARK 21Shares Bitcoin ETF (ARKB). This investment, valued at approximately $6.6 million, marks a pivotal step in integrating digital assets into Michigan’s investment portfolio.
A Growing Trend Among State Pension Funds
Despite representing only a small fraction of Michigan’s substantial $143.9 billion in assets under management, this move is notable. Michigan has become the third state to allocate a portion of its pension fund to cryptocurrency through ETFs since Bitcoin ETFs were approved earlier this year.
The trend of state pension funds investing in Bitcoin ETFs began earlier in 2024. In May, the State of Wisconsin Investment Board reported a $164 million investment in Bitcoin ETFs offered by Grayscale and BlackRock. More recently, Jersey City Mayor Steven Fulop announced plans to allocate 2% of the city’s pension fund to Bitcoin ETFs.
Also Read: Jersey City Pension Fund to Invest in Bitcoin ETFs, Says Mayor Fulop
Weighing Risks and Rewards
Despite warnings on the Michigan government’s official website about the volatility and regulatory uncertainties of cryptocurrency investments, the state’s pension fund has moved forward with its investment in the ARK 21Shares Bitcoin ETF. This decision reflects a growing confidence in the potential of digital assets to diversify and enhance long-term investment strategies.
The ARK 21Shares Bitcoin ETF has been trading on the Cboe BZX Exchange since January. As of July 25, the ETF had a net asset value of $64.68. If this value has been maintained, Michigan’s investment could now be worth over $7 million, highlighting the potential for significant returns.
By venturing into cryptocurrency investments, Michigan is positioning itself at the forefront of a financial trend that is gaining momentum across various state pension funds. This move could pave the way for other states to consider similar strategies, balancing the pursuit of innovative investment opportunities with the inherent risks of the volatile crypto market.
