Wisconsin Pension Funds Bet Big on Bitcoin

The Wisconsin Investment Board has revealed that it holds approximately $321 million in Bitcoin, marking a significant step for the cryptocurrency's acceptance in the investment world. The board, which manages the state's pension funds, has been quietly accumulating Bitcoin-based ETFs and other digital assets over the past year.

The board's portfolio includes around $164 million in Bitcoin-based ETFs, as well as $100 million in shares of the IBIT, a digital asset bank. Additionally, the board previously held $64 million in shares of the Grayscale Bitcoin Trust (GBT), which have since been transferred into the IBIT.

The board's decision to invest in Bitcoin is driven by a desire to hedge against inflation. A spokesperson for the board recently stated that holding a portion of funds in Bitcoin can serve as a defense against random inflation, and the value adjusted for inflation can be recovered when the Bitcoin price increases. With the Bitcoin price currently around $1800 or more, the board's investment in Bitcoin-based ETFs has likely generated a significant profit.

Attorney Allie Itami believes that it is easier for pension funds to hold cryptocurrencies due to their clinical fiduciary responsibilities under the Employee Retirement Income Security Act of 1974. This allows pension funds to invest in cryptocurrencies when there is enough traction to pay off employees.

Other entities have also begun to follow the Wisconsin Investment Board's lead in investing in Bitcoin. In Q1 2024, the Retirement System of Michigan stocked up around $6.6 million worth of Bitcoin. Additionally, the Carolina Representatives House and other entities are exploring similar investments in Bitcoin.

As more entities continue to invest in Bitcoin, it is expected to support the revival of the cryptocurrency at a great pace. The Wisconsin Investment Board's revelation of its Bitcoin holdings is a testament to the growing acceptance and legitimacy of cryptocurrencies in the investment world.