As an experienced crypto investor who has witnessed the evolution of digital assets within the traditional finance landscape, I find it fascinating to see institutional players like the State of Wisconsin Investment Board (SWIB) and other US states embracing Bitcoin ETFs.
According to a SEC filing, Wisconsin State Investment Board (SWIB) disclosed owning approximately 2.9 million shares of BlackRock’s Bitcoin ETF, known as IBIT, by the end of Q2 on June 30. This filing indicates that SWIB holds 2,898,051 units of the iShares Bitcoin Trust, with an estimated investment value of around $99 million based on the average price of Bitcoin during the second quarter.
The State of Wisconsin Investment Board (SWIB) increased its holdings in Bitcoin ETFs from 2.5 million shares at the end of March to a higher amount. Furthermore, the filing reveals that SWIB sold approximately 1 million shares of the Grayscale Bitcoin Trust (GBTC), which it held during the first quarter. Similarly, Morgan Stanley divested its GBTC stake worth $270 million.
In light of the substantial fees charged by GBTC, which is significantly higher than other Bitcoin ETF providers at 2.5% compared to their standard 0.25%, this large reduction or offloading occurs.
The SWIB serves as an autonomous entity, responsible for the administration of investments for Wisconsin’s Retirement System, the State Investment Fund (SIF), and assorted state investment pools.
US States Increase Exposure to Bitcoin
An increasing number of U.S. states are embracing Bitcoin integration within their Treasury departments. For instance, last month on the 26th of July, it was announced that Michigan State Retirement System owns approximately 110,000 shares in the ARK 21Shares Bitcoin ETF (ARKB), which equates to a significant value of around $6.6 million.
Though it represents only 0.004% (or $5.6 million) of their total assets under management worth $143.9 billion as of December 2023, Bloomberg ETF analyst Eric Balchunas emphasized that it signifies a significant step forward. Meanwhile, Jersey City Mayor Steven Fulop revealed the city’s pension fund intends to invest in Bitcoin by purchasing Bitcoin-related ETFs.
Lately, investments into Bitcoin Spot Exchange-Traded Funds (ETFs) have been fluctuating significantly due to the turbulence in the overall cryptocurrency market. On August 14th specifically, these Bitcoin Spot ETFs experienced withdrawals amounting to $81 million, with Grayscale’s GBTC recording a withdrawal of $57 million.
As major entities show increasing interest in Bitcoin, it’s evident that the appetite for this asset class is expanding within the conventional financial sector. With appropriate regulations established, traditional finance (TradFi) institutions may soon introduce Bitcoin trading and safekeeping services.
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2024-08-15 14:36