Bitcoin, crypto get $187 million investment from Wisconsin board

The Wisconsin State Board of Investment is the first public agency in the country to invest in cryptocurrency.

The board invested a total of $187.1 in funds and companies related to bitcoin and other cryptocurrencies, according to a May 14 quarterly filing with the U.S. Securities and Exchange Commission.

The Wisconsin State Investment Board manages the assets of the Wisconsin Retirement System, State Investment Fund and other funds.

Investment in cryptocurrency represents only a small portion (about one-tenth of 1 percent) of the Wisconsin State Board of Investment’s more than $156 billion in assets by the end of 2023.

It’s a relatively small but speculative bet, said Bob Bukowski, managing partner of Alpha Investing Consulting, a Milwaukee-based consultant on retirement programs, endowments and major retirement plans.

Burkowski probably asked the investment board “you didn’t have any of these?” He said the question would be asked. If the value of Bitcoin doubles or triples and the investment board has not invested in the cryptocurrency.

“And on the other hand, if it goes to zero, a tenth of 1% is kind of meaningless to them,” Bukowski said. “To me it doesn’t look like a full-size position, it looks like ‘we need some of this so if it works we’ll look good’.”

He said an investment of 1 percent or 5 percent would make a significant investment in cryptocurrency.

More: In rural Wisconsin, former employees lift curtain on troubled crypto mine

SEC opens door with approval of cryptocurrency ETFs

In a May 14 SEC filing, the Wisconsin State Board of Investment became the first public agency to publicly disclose its investment in cryptocurrency.

Its largest investment was $99.1 million in the iShares Bitcoin Trust, an exchange-traded fund managed by BlackRock, the world’s largest asset manager with more than $9.1 trillion in assets. An exchange-traded fund is a collection of stocks, bonds or other investments that can be bought and sold like stocks.

At the end of March, the foundation had approximately $17.8 billion in bitcoin and $140,552 in cash. The increase in Bitcoin purchasing coincides with the SEC allowing cryptocurrency funds to be bought and sold.

Blackrock launched the iShares Bitcoin Trust in January after the SEC approved trading of bitcoin-based ETFs. The fund had approximately $17.8 billion invested in Bitcoin as of the end of March. The fund closed Tuesday at $38.98, up nearly 46% from its January launch.

Wow, the state bought a pension $IBIT in the first quarter. You normally won’t be able to buy these big fish institutions at 13Fs for about a year (when the ETF gains more liquidity), but as we’ve seen these are no ordinary launches. Good sign, expect more as institutions tend to move in herds https://t.co/leKVe2CK1S

— Eric Balchunas (@EricBalchunas) May 14, 2024

Other utilities will likely follow the board’s lead, Bloomberg Senior ETF Analyst Eric Balchunas said in a Twitter post.

The story continues

“Wow, a state pension was purchased $IBIT in the first quarter. Normally you won’t get these big fish institutions for a year or so (when the ETF gains more liquidity) but as we’ve seen these are no ordinary launches. “Expecting more is a good sign, as institutions tend to move in herds,” he wrote.

When asked for comment on cryptocurrency investment, the board stated that it “does not comment on specific investments.”

In addition to bitcoin investing through BlackRock, the state’s cryptocurrency investments include:

$63.6 million in Grayscale Bitcoin Trust. Grayscale has approximately $35 billion in assets.

$24.5 million on Coinbase, a cryptocurrency exchange platform that allows users to buy and sell different cryptocurrencies.

Allowing bitcoin-based ETFs should not be viewed as an SEC endorsement of cryptocurrency, SEC Chairman Gary Gensler said in January.

“Investors should be mindful of the numerous risks associated with Bitcoin and products whose value is tied to crypto,” Gensler said.

Kabosu, the Japanese dog who became an online meme and the face of the Dogecoin cryptocurrency, has died, his owner announced.

Cryptocurrency trading has been likened to trading a commodity like oil or metal, but Gensler noted that these materials have industrial uses.

“Bitcoin in contract is a speculative, volatile asset that is also used primarily for illicit activities such as ransomware, money laundering, sanctions evasion, and terrorist financing,” Gensler said.

Bukowski said the SEC’s involvement was a way to protect investors.

“They need a placeholder to say, ‘We need to watch this because we said it’s OK to trade,'” Bukowski said. “Now they go into BlackRock and go into Grayscale and say: ‘Okay, how do you handle this? How do you buy? How do you sell?’… all those kinds of questions, now the SEC has jurisdiction.”

Bitcoin has traded between $66,685 and $70,314 per coin over the past five days. It closed at $68,305 on Wednesday.

This article first appeared in the Milwaukee Journal Sentinel: Wisconsin investment board pours millions into cryptocurrency funds