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Pension Funds Expand Crypto Investments Amid Bitcoin’s Growth
The latest developments indicate a significant shift in the investment landscape as pension funds worldwide are increasingly embracing cryptocurrencies, particularly Bitcoin and Ethereum-focused ETFs. This surge in institutional adoption is driven by the rising value of Bitcoin and improved market stability.
Wisconsin and Michigan pension funds have taken the lead in this trend, with substantial allocations to cryptocurrency exchange traded funds (ETFs) through their pension schemes. The Wisconsin Investment Board now holds $155 million worth of BlackRock’s Bitcoin ETF, which has seen a 50% growth in value over the past quarter. Similarly, Grayscale’s Ethereum ETF holds a staggering $12.9 million worth of Michigan’s state pension fund assets.
The notable increase in institutional interest can be attributed to regulatory clarity and Bitcoin’s impressive performance last year, with its price doubling and surpassing the $100,000 mark. Industry experts predict further gains as a pro-crypto administration takes office in the United States.
In addition, pension funds are opting for regulated ETFs as a safer entry point into crypto investments. This development highlights the growing acceptance of cryptocurrencies as viable investment assets, underscoring their role in diversifying portfolios and potentially enhancing returns.
The UK-based £50 million pension scheme has taken an early lead by allocating £1.5 million to Bitcoin directly. Industry consultancy Cartwright noted that more pension funds are exploring crypto opportunities, indicating a significant shift towards increased adoption.
In Australia, AMP group recently added Bitcoin futures to its portfolios in the hopes of boosting returns. Despite concerns about past setbacks, such as the Ontario Teachers’ Pension Plan’s $95 million loss in the FTX collapse, institutional investors are gradually re-entering the crypto market.
The trend is also driven by individual savers pressuring pension providers for crypto options. Cartwright reported over 50 inquiries from investors seeking full exposure to cryptocurrencies. As a result, multi-employer pension funds are considering dedicated Bitcoin funds to attract new members.
Source: cryptonewsland.com
