One of the largest pension funds in the United States made headlines recently with a substantial allocation to Bitcoin ETF products. The State of Wisconsin Investment Board (SWIB) disclosed a $162 million investment in the nation’s leading Bitcoin spot ETF products earlier this year. According to a 13F filing with the Securities and Exchange Commission (SEC), SWIB held $99 million in the iShares Bitcoin Trust (IBIT) as of March 31. Additionally, it held $63 million in the Grayscale Bitcoin Trust (GBTC), BlackRock’s primary competitor in size but with a higher 1.5% annual management fee.
This allocation signifies a significant milestone for Bitcoin’s adoption as a global store of value. Bitcoin advocates have long desired to see it transition from a speculative asset for traders to a respected asset held by corporations and governments. Bloomberg ETF analyst Eric Balchuas expressed his thoughts on the SWIB disclosure, stating, “Normally you don’t get these big fish institutions in the 13Fs for a year or so; expect more, as institutions tend to move in herds.”
Implications of SWIB’s Investment
The reported total value of SWIB’s securities portfolio was $37.8 billion, with the Bitcoin position accounting for only 0.4% of the total allocation. As of December 31, 2023, SWIB managed $155 billion in assets, representing 85% of the Wisconsin retirement system.
While SWIB is the first pension fund to publicly disclose Bitcoin holdings, there are ongoing political efforts to encourage other states to invest in Bitcoin ETFs. Ohio state Rep. Steve Demetriou recently introduced pro-crypto legislation requiring the state’s retirement systems to consider Bitcoin ETFs. Beyond pension funds, major banks like Wells Fargo and JPMorgan also hold Bitcoin ETF allocations. Analysts suggest that these firms hold shares of the funds as authorized participants rather than for direct investment purposes.
In a policy statement in January 2023, the Fed prohibited banks from holding “crypto-assets” on their balance sheets,” mentioned Swan Bitcoin analyst Sam Callahan on Twitter. “The notion of large banks investing in Bitcoin ETFs due to a sudden bullish sentiment is unfounded.”
