Jersey City’s pension funds plans to purchase bitcoin ETFs over the coming weeks. They began the process of allocating to such products in early 2018.
After Donald Trump’s win in the presidential election, industry observers have predicted that institutional crypto adoption will likely increase.
“Would we have liked to get involved at $60,000 as opposed to $90,000?” Jersey City Mayor Steven Fulop said Tuesday. “The answer’s obviously yes. But I think if you look in a year or two years from now, it’ll still be much higher than it is today.”
Fulop, a Democrat, said in July that Jersey City’s pension fund was planning on getting exposure to BTC funds.
John Metro, Jersey City’s Business Administrator said he began discussing this with Fulop around the time Wisconsin’s investment board announced an allocation of approximately $100 million in bitcoin ETFs. This was in May.
Metro presented the idea, which was composed of five commissioners, to the board of the pension fund. The board had questions — such as the time horizon it might hold the BTC products — but did not show opposition, the Jersey City officials noted.
Due to the relatively short history of US spot Bitcoin ETFs (they were launched in Janurary) compared with other assets that have a track record over the past year, the board needed to update certain investment rules.
Metro stated that it was done around a week ago. Standard protocol, according to him, requires that pension funds refrain from making major changes during the month prior to an election because of volatility.
“Now that the asset is identified as part of our investment strategy, we’ll actually go to the physical market in the next three weeks,” Metro told Blockworks Tuesday. He explained that the timing of the allocation was not meant to be post-election, but how it played out.
The pension fund — with about $225 million — is looking at the BTC products offered by BlackRock and Fidelity, given their high volumes. It could look to establish a 2% or so position in bitcoin ETFs as a start, the officials said — trimming allocations in other assets to make room.
Fulop or Metro didn’t specify which assets would be reduced. The mayor noted that gold and bitcoin are similar in terms of their ability to serve as an asset. “store of value.”
“And if you think about the utility relative to gold, in many ways bitcoin is more advantageous in the sense that you can move bitcoin around instantaneously,” Fulop is added.
Continue reading to read more from my interview with Fulop.
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