- Michigan Pension Fund Holds $10M in Ethereum ETFs
- The first U.S. pension fund to invest in an Ethereum ETF.
- This investment signals the institutional potential for altcoins.
Big banks and investors are warming up to crypto. After major institutional investors expressed interest in Bitcoin , Ethereum may be following suit. The second-largest asset seems to be the next play for diversification.
Recently, the State of Michigan Retirement System (SMRS), disclosed a $10 million investment in Grayscale’s Ethereum ETF. This makes it the first US pension fund that holds an interest in ETH. This event potentially paves the way for similar investments.
Michigan Becomes First Pension Fund to Hold ETH
Ethereum seems to be gaining momentum among institutional investors. On Monday, November 4, the State of Michigan Retirement System (SMRS) revealed a $10 million investment in Grayscale’s Ethereum ETF.
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As Matthew Sigel, Head of Digital Assets Research at VanEck, pointed out, Michigan’s pension fund became the top-five institutional holder of the fund. Beyond Grayscale, the SMRS also held 460,000 shares in Ethereum Mini Trust.
This puts Michigan’s pension fund exposure to Ethereum at $11 million, a significant figure for traditionally conservative investors. What is also interesting is that the SMRS has more exposure to Ethereum than Bitcoin. Notably, the SMRS also holds $7 million in Bitcoin ETFs.
Pension Funds Increasingly Bet on Crypto
While Michigan’s pension fund is the first to invest in Ethereum ETFs, it is not the first to invest in crypto. This title goes to Wisconsin, whose State Investment Board has nearly $100 million in BlackRock’s Bitcoin ETFs. Moreover, Florida’s pension funds hold approximately $800 million in crypto-related investments.
Exchange-traded funds (ETFs) offer a regulated and relatively safe way for institutional investors to gain crypto exposure. These investors value the counter-cyclical nature of crypto assets, which helps de-risk their portfolios.
Many crypto traders eagerly anticipated the approval of spot crypto ETFs because of the potential for more institutional investments. Institutional money in crypto has the potential to raise both valuations and liquidity in the sector.
On the Flipside
- ETFs still face significant regulatory challenges, especially in the US. While the Securities and Exchange Commission (SEC) approved Bitcoin and Ethereum ETFs, other coins remain in regulatory limbo .
- After Bitcoin and Ethereum spot ETFs were approved, many speculated on which token might follow. Solana seems to have the best chances, but institutional interest is lagging.
Why This Matters
Institutional interest in Ethereum ETFs signals that the long-awaited regulatory approval is paying off. Institutions hold significant capital, and their crypto investments have a significant impact on the market.
Read more about crypto ETFs:
Best Cryptocurrency ETFs in 2024: Which Funds Are Investing in The Blockchain Industry?
Read more about the Metawin casino hack:
How Metawin Casino Lost $4M in Ethereum, Solana Wallet Hack
