Wisconsin’s decision to invest in Bitcoin has been praised by finance expert David Krause, who believes that other US states will soon follow suit and invest in the leading cryptocurrency. Although Wisconsin’s initial investment was only $180 million, Krause sees it as a trial run and expects the state to continue investing more money into Bitcoin ETFs.
The State of Wisconsin Investment Board (SWIB) made history three weeks ago by becoming the first in the US to invest in Bitcoin through Grayscale and BlackRock ETFs. According to a financial expert at a local university, this is just the beginning of several crypto investments, which will inspire other state funds to pour billions into Bitcoin ETFs.
In a recent interview, David Krause discussed the impact of Wisconsin’s investment on the crypto world. Krause, a professor emeritus at Marquette University and the founder of the institution’s AIM Program, stated that the investment took the industry by surprise. Most people expected it would take years before institutional involvement in Bitcoin investing.
Krause attributes Wisconsin’s ability to invest in BTC to its fully funded pension fund. Unlike the pension fund for the state of Illinois, which is only funded at 50% of its level, Wisconsin has the luxury of investing for the long term without worrying about liquidity.
Although the fund faced criticism for its decision due to Bitcoin’s volatility, Krause pointed out that most assets, including some stocks, are volatile. He compared Bitcoin’s 63% gain year-to-date to a biopharmaceutical firm’s 412% gain, emphasizing that supply and demand for Bitcoin are starting to balance out. He believes that the investment community is beginning to view Bitcoin as a viable alternative investment.
While Wisconsin was the first state to invest in Bitcoin, Krause expects others to join in. However, initially, it will be limited to states with well-funded pension funds like Wisconsin’s. Wisconsin’s fund manages approximately $156 billion, making its Bitcoin investment a negligible 0.1% of its portfolio.
Krause sees Wisconsin’s investment as an entry point and a trial run to gauge public reaction and resistance. He believes that the portfolio’s substantial impact will only occur when Bitcoin’s position reaches 1% or 2%.
In conclusion, Krause predicts that more states will invest in Bitcoin, following Wisconsin’s lead. As the investment community’s understanding of Bitcoin as a viable alternative investment grows, other states with well-funded pension funds are likely to follow suit.