Deniz 
David Krause, a Milwaukee-based Marquette University professor of finance, said the first quarter addition of two spot bitcoin exchange-traded funds (ETFs) to Wisconsin’s pension plan was probably only the beginning for the U.S. state’s investments in crypto.
As of March 31, the SWIB bought BlackRock’s iShares Bitcoin Trust and Grayscale’s Bitcoin Trust, valued at $164 million, according to a filing with the U.S. Securities and Exchange Commission in May.
The revelation stunned the sector as large institutions—especially pensions—do not usually participate in young ETFs like the spot bitcoin ETFs, but the state’s investment board has been ahead of the game before, said Krause in an interview with PBS Wisconsin.
“Wisconsin’s investment board has always been innovative,” he stated. “This is a fully funded pension fund so in a way, they have the luxury of being able to invest for the long term. They don’t need to worry as much about liquidity as, say, the pension fund for the state of Illinois, which is only funded at 50% of its level,” he added.
Based on its website, the SWIB had about $156 billion in assets as of the end of 2023; so, its investment in the bitcoin ETFs amounted to a meager 0.1% of its portfolio.
Krause, however, said the investment was only a “toe in the water,” and he expects the SWIB to contribute to that sum and for other pensions to eventually follow suit.
“I think it’s just an entry point. I think they’re testing to see the reaction of the public to whether or not there’s resistance to owning this and they’re using it as a trial run, because it really is not going to impact the portfolio substantially, until you get to maybe a 1% or 2% positioning,”
During the first three months of the year, around 500 institutional investors declared allocations into the spot bitcoin ETFs. With $2 billion in holdings across many of the funds, or around 3% of its overall assets under management, hedge fund Millennium Management was the largest owner as of March 31.