Jersey City to Invest City’s Pension Fund in Bitcoin ETFs

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The Mayor of Jersey City has expressed plans to allocate a part of the city’s pension fund to Bitcoin (BTC) exchange-traded funds (ETFs). Steven Fulop, who has been mayor since 2013, considers BTC important enough to follow through with a similar action recently taken by the Wisconsin Pension Fund.

In an X post on July 25, Mayor Fulop wrote that the Jersey City pension fund (Employees Retirement System of Jersey City) is working on a submission to the United States Securities and Exchange Commission (SEC) to allow allocation to Bitcoin ETFs. Although he did not specify a percentage, Fulop said the paperwork should be complete by the end of the summer.

Bitcoin adoption is on the rise and expanding towards government authorities. Although there is still a knowledge barrier, adoption rates are healthy because the basic use of cryptocurrency for the average user does not require deep technical knowledge. On the business side, payment processors help convert crypto to fiat, allowing businesses across all industries to accept patronage from a larger audience. For instance, finding a Bitcoin casino for “dummies” is easy for players interested in the online gambling sector, because placing bets, hopefully winning big, and enjoying exciting games online using cryptocurrencies is easy and does not require experience.

Fulop’s belief in Bitcoin is very evident in his post. The Jersey City mayor wrote:

“The question on whether crypto/Bitcoin is here to stay is largely over + crypto/Bitcoin won… I’ve been a long-time believer (through ups/downs) in crypto. But broadly, beyond crypto, I do believe blockchain is amongst the most important new technology innovations since the internet.”

Pension and Retirement Funds are Investing in Crypto

Jersey City is following in the footsteps of the State of Wisconsin Investment Board (SWIB). In May, the SWIB submitted a filing to the SEC, indicating that it had over 2.4 million shares in the BlackRock iShares Bitcoin Trust (GBTC), and more than 1 million shares worth of Grayscale Bitcoin Trust (GBTC). The portfolios are worth about $100 million and $64 million, respectively.

The number of large-scale investments in crypto from varying funds is increasing. For instance, pensions from Virginia’s Fairfax County have been invested in Bitcoin through the New Finance Income Fund from VanEck. The Houston Firefighters’ Relief and Retirement Fund also has crypto investments.

The demand for these investments, especially through crypto ETFs, will likely increase as the products become more popular. In January, the SEC approved spot Bitcoin ETFs after repeated rejections that lasted more than a decade. In 2013, Gemini submitted the first-ever filing for a spot BTC. However, the SEC rejected the proposal multiple times until the last one in 2018. Several other issuers were denied as the Commission continuously cited problems with fraud and market manipulation as reasons for the rejections. According to data from Farside Investors, spot BTC ETFs have now received total net inflows of $17.5 billion.

Interestingly, the SEC also approved spot Ether (ETH) ETFs, giving the green light to 8 issuers, including BlackRock and VanEck. Farside data shows that the total net inflow has already hit $179 million.

Corporate Investments in ETFs

The exchange-traded products represent a long-awaited opportunity for institutional involvement in Bitcoin and cryptocurrencies. For several years, organizations have been reluctant to invest in the space for several reasons. While the inherent volatility in the crypto sector is a significant problem, another concern is the inadequate protections ensured through registration with official authorities.

Institutional involvement in cryptocurrencies will likely drive general interest and draw more attention, with the crypto community enjoying digital asset use for remittances, decentralized finance (DeFi), crypto gambling, and non-fungible tokens (NFTs). According to current CoinMarketCap data, Bitcoin is trading at $67,421 after gaining 3.89% in the last 24 hours and 1.% in 7 days. On the other hand, ETH data shows a $3,253 price, with a 3.69% 24-hour increase, and a loss above 7%.

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