Wisconsin’s Pension Fund Invests $164 Million in Bitcoin ETFs: What It Means for the State

The Wisconsin Investment Board made a bold move earlier this year by purchasing $164 million worth of shares in Bitcoin exchange-traded funds. This decision came after the Securities and Exchange Commission gave the green light for the creation of Bitcoin ETFs in January.

Paul Nylen, a professor at the University of Wisconsin-Whitewater, emphasized the significance of these purchases being in ETFs. This allows pension funds and investment boards to have a third party custody the Bitcoin, such as Blackrock or Fidelity, and issue shares that can be bought by the investment board.

While Bitcoin comes with its fair share of controversies, including high energy usage and links to illicit activities, Nylen believes that the volatility of Bitcoin shares can actually be beneficial for long-term growth. The price of Bitcoin has seen significant fluctuations, but Nylen sees this as a positive aspect for the asset.

In a conversation with WPR’s “Wisconsin Today,” Nylen explained the difference between buying shares of a Bitcoin ETF and buying Bitcoin directly. He highlighted the importance of trusted custodians holding the private keys to Bitcoin, as well as the need for regulatory clarity in the cryptocurrency space.

Looking ahead, Nylen believes that Wisconsin should consider increasing its investment in Bitcoin, as he sees it as a long-term asset that should be held onto. With the regulatory landscape evolving and Bitcoin’s potential for growth, the Wisconsin Investment Board’s decision to invest in Bitcoin ETFs could prove to be a wise one for the state’s pension fund.