Marquette University Professor Emeritus David Krause told Wisconsin Public Radio on May 31st that other states in the US can also follow Wisconsin’s lead in investing in the BTC ETF. Krause referred to BTC as a “good investment” for state pension funds, highlighting its role in diversification, potential for high returns, and its use as a hedge against inflation.
Krause added that the ability of BTC to mitigate government-induced volatility has yet to be fully recognized. While Krause remains optimistic, he clarified that only the State of Wisconsin Investment Board (SWIB) and a few other state funds can withstand the market cycles and volatility of crypto assets. He stated, “I don’t expect those states with insufficient funds to afford such investments because it is a long-term game.”
Krause did not predict which states are most likely to invest. However, Equable data shows that by 2023, seven state pension funds have a funding ratio equal to or greater than Wisconsin’s 95%. Three of the seven funds have an excess funding ratio exceeding 100%. On the other hand, the Illinois State Board of Investment has the lowest funding ratio at 51%.
Krause also commented on the potential for Wisconsin’s status to rise. He referred to SWIB’s initial investment as a “trial run” and said, “I think this is just a starting point. I think they are testing the public’s reaction to see if there is any resistance to having this portion of the funds.”
Krause also emphasized the speed of Wisconsin’s investment, stating that the investment industry was “surprised” by the pension funds’ quick investment in the BTC ETF products, rather than waiting for several years as expected.
SWIB holds over $160 million worth of BTC ETF stocks, including BlackRock’s IBIT and Grayscale’s GBTC. Krause estimates that this investment constitutes 0.1% of SWIB’s total value of $18 billion. However, recent filings show that the fund’s value is lower at $37.9 billion.
According to Fintel data, SWIB is currently among the top BTC ETF investors. As of June 3rd, the company ranks sixth in terms of IBIT holdings and thirteenth in terms of GBTC holdings.
