tl;dr
The State of Michigan Retirement System has tripled its holdings in the ARK 21Shares Bitcoin ETF to 300,000 shares, valued at $11.4 million, as of Q2. The $19.3 billion pension fund also holds 460,000 shares of the Grayscale Ethereum Trust worth about $13.6 million. These investments represent less ...
The State of Michigan Retirement System has significantly increased its Bitcoin exposure by tripling its holdings of the ARK 21Shares Bitcoin ETF to 300,000 shares, valued at $11.4 million as of the second quarter. This marks a substantial rise from the 100,000 shares reported at the end of March, as disclosed in a recent SEC filing. Managing $19.3 billion in assets, the pension fund now holds considerable positions in both Bitcoin and Ethereum-related investment products.
Investment expert Ganesh Mahidhar explained that pension funds evaluate assets based on market capitalization, potential upside, and maximum drawdowns, using metrics like the Sharpe ratio to balance return against risk. According to him, the cautious yet optimistic purchases by the Michigan fund amount to less than 0.1% of their cash portfolio, signaling a strategy to mitigate significant losses while maintaining exposure to cryptocurrency growth.
Besides the Bitcoin ETF, the fund consistently holds 460,000 shares of the Grayscale Ethereum Trust, valued at about $13.6 million since September 2024. This move complements broader trends, as state pension funds across the United States increasingly invest in digital assets. For example, the State of Wisconsin's Investment Board owns over 6 million shares of BlackRock's iShares Bitcoin Trust worth $387.3 million.
Despite this growing institutional appetite, Bitcoin ETFs have seen four consecutive days of outflows totaling $1.4 billion, with ARK 21Shares experiencing only one day's outflows of $5.1 million during that period. Looking ahead, Standard Chartered forecasts Bitcoin could reach $200,000 by the end of the year, driven largely by increased pension fund participation. The bank projects that institutional inflows from pension funds will rise in 2025, potentially sustaining momentum in the cryptocurrency market.