Finance expert David Krause has praised Wisconsin’s bold decision to invest in Bitcoin and predicts that other US states will soon follow suit. While Wisconsin’s initial investment was only $180 million, Krause believes it is just a trial run and expects the state to allocate more funds to Bitcoin ETFs in the future.
The State of Wisconsin Investment Board (SWIB) made headlines three weeks ago when it became the first in the United States 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, with other state funds expected to pour billions into Bitcoin ETFs.
In a recent interview with PBS Wisconsin, David Krause discussed the impact of Wisconsin’s investment on the crypto world. Krause, a professor emeritus at Marquette University in Milwaukee and the founder of the institution’s AIM Program, stated that the Wisconsin fund’s decision to invest in Bitcoin was a surprise to the industry. He noted that most people believed it would take several years before institutional involvement in Bitcoin investing.
However, Krause believes that Wisconsin was well-positioned to invest in BTC due to its fully funded pension fund. This gives the state the luxury of being able to invest for the long term without worrying as much about liquidity issues. In comparison, the pension fund for the state of Illinois is only funded at 50% of its level.
Despite facing criticism from traditional finance sectors regarding Bitcoin’s volatility, Krause pointed out that many assets, including stocks, are also volatile. He highlighted the example of Janux Therapeutics, a biopharmaceutical firm based in California, which has seen a 412% increase in market cap this year. In comparison, Bitcoin has gained 63% during the same period.
Krause emphasized that Bitcoin’s supply and demand are starting to balance out, and the investment community is increasingly viewing it as a viable alternative investment.
Currently trading at $69,000, Bitcoin has experienced a slight loss of less than 1% in the past day as the broader crypto market enters a consolidation phase.
Looking ahead, Krause believes that more states will join Wisconsin in investing in Bitcoin. However, he expects this trend to be limited to states with well-funded pension funds. Wisconsin’s fund manages around $156 billion, making its Bitcoin investment only 0.1% of its total portfolio.
Krause sees Wisconsin’s investment as just the beginning, with the state testing public reaction and resistance to owning Bitcoin. He views it as a trial run and believes that the portfolio’s substantial impact will only occur when the Bitcoin position reaches 1% or 2%.
In conclusion, Bitcoin’s growing acceptance among institutional investors is expected to continue, with more US states likely to invest in the cryptocurrency.