Michigan’s state pension fund recently made headlines by disclosing an exposure of over $11 million to spot Ethereum exchange-traded funds (ETFs) in its latest 13-F filing. This move positions Michigan as the first state to invest in Ethereum, surpassing its previous $7 million investment in Bitcoin ETFs.
As of September 30th, the Michigan state pension fund held 460,000 shares of the Grayscale Ethereum Fund (ETHE), valued at $10 million, and 460,000 shares of the Ethereum Mini Trust, amounting to $1.1 million. This significant investment makes Michigan the fourth and second largest holder of these funds’ shares, respectively.
Ethereum’s performance in the market has been described as a “big win” by Bloomberg senior ETF analyst Eric Balchunas, especially considering the lackluster price performance of Ethereum compared to Bitcoin. Despite this, the state pension fund decided to increase its exposure to ETH, indicating a positive outlook on the cryptocurrency.
In addition to Michigan, the State of Wisconsin Investment Board reported a $164 million exposure to Bitcoin via ETFs, while politicians in Jersey City and Florida have also discussed adding BTC to their pension funds. This trend suggests a growing interest in cryptocurrencies among institutional investors.
The disparity in performance between Ethereum and Bitcoin is also evident in their ETF inflows. While US-traded Bitcoin ETFs saw $24.2 billion in yearly inflows, Ethereum ETFs experienced nearly $480 million in negative net flows. However, experts like Nate Geraci, CEO of the ETF Store, believe that Ethereum ETFs could gain traction in the market, similar to Bitcoin ETFs.
Geraci predicted back in March that Ethereum ETFs would be more significant than anticipated, and he reiterated this belief on November 3rd, stating that it is only a matter of time before US-traded Ethereum ETF inflows increase.
Overall, Michigan’s investment in Ethereum ETFs marks a significant milestone in the cryptocurrency market, highlighting the growing interest and potential for digital assets in institutional portfolios. As more states and institutions explore opportunities in the crypto space, the landscape of traditional investments is likely to evolve to include these innovative assets.
