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- Finance expert David Krause has applauded Wisconsin’s bold move to invest in Bitcoin and says that a wave of US states will soon invest in the top crypto.
- While Wisconsin only invested $180 million, Krause believes it’s a trial run and that the state will continue pouring more money into Bitcoin ETFs.
Three weeks ago, the State of Wisconsin Investment Board (SWIB) became the first in the US to invest in Bitcoin through Grayscale and BlackRock ETFs, as Crypto News Flash reported. According to a financial expert at one of the local universities, this is the first of several investments in the crypto, and it will inspire other state funds to pour billions into Bitcoin ETFs.
In a recent interview, David Krause delved into the investment which has shaken up the crypto world. Krause is a professor emeritus at Milwaukee-based Marquette University and founded the institution’s AIM Program.
Speaking to PBS Wisconsin, he claimed that the Wisconsin fund’s investment in Bitcoin shocked the industry. Most people “expected it might take several years before there would be institutional involvement with Bitcoin investing.”
While Wisconsin surprised most, Krause says that it was in the best position to invest in BTC because it has a fully funded pension fund.
So, in a way, they have the luxury of being able to invest for the long term. They don’t need to worry as much about liquidity as, say, the pension fund for the state of Illinois, which is only funded at 50% of its level.
he told the media outlet.
Immediately after the fund revealed it had invested in BTC, legacy finance criticised the decision, taking aim at BTC’s volatility. However, as the finance professor noted, most assets are volatile, including some stocks. For instance, California-based biopharmaceutical firm Janux Therapeutics, whose market cap is $2.85 billion, has gained 412% year-to-date. BTC, on the other hand, has only gained 63% in that time.
Krause added:
Bitcoin has moved around a lot, but supply and demand are starting to balance out. And I do think the investment community is beginning to understand this more as a viable alternative investment.
Bitcoin trades at $69,000, losing less than 1% in the past day as most of the crypto market entered a consolidation phase.
Expert: More States to Invest in Bitcoin
While Wisconsin was the first, Krause believes other states will join in and invest in Bitcoin. However, initially, it will be limited to states with well-funded pension funds like Wisconsin’s.
Wisconsin’s fund manages around $156 billion, which equates its investment in BTC to a negligible 0.1% of its portfolio.
Krause noted:
I think it’s just an entry point. I think they’re testing to see the reaction of the public to whether or not there’s resistance to owning this. And they’re using it as a trial run because it really is not going to impact the portfolio substantially until you get to maybe a 1% or 2% positioning.
