As the price of bitcoin jumped to a record $75,000 and cryptocurrencies rallied broadly on President Donald Trump's election victory, institutional investors emerged as buyers of crypto ETFs.
The State of Michigan Retirement System bought shares of two Grayscale Investments-sponsored spot ether ETFs during the quarter ended Sept. 30, a filing with the Securities and Exchange Commission shows.
While the purchase pre-dated the election results, “this is a small investment for them, but it’s big symbolically,” Bloomberg Intelligence Senior ETF Analyst Eric Balchunas said of SMRS’s investment, which across both of the ETFs totaled just over $11 million. “A pension is … like catching a sailfish. It’s like big game.”
SMRS held 460,000 shares of the Grayscale Ethereum Trust ETF valued at about $10.1 million, the retirement system’s 13F holdings report for the quarter ended Sept. 30, filed Nov. 4, showed. The pension fund also held 460,000 shares of the Grayscale Ethereum Mini Trust ETF valued at about $1.1 million, the filing showed.
The two Grayscale ETFs were among the nine spot ether ETFs that began trading in the U.S. on July 23.
“So, to get this big of (an) investor … within your first year is major,” Balchunas said, adding that he was not aware of any other state pension fund that has invested in a spot ether ETF. “It’s especially major because … the ether ETFs have been really living in the gargantuan shadow of the bitcoin ETF rollout and so it’s finally like they got a little love, a little attention.”
The SMRS investment in the two ETFs is also important given that institutions have been known to exhibit “a herd mentality,” Balchunas added.
“If you get a couple of them buying something, the rest get interested,” he said. “So, it’s only one, but it’s a really good start for trying to attract some of those … other big fish.”
The $3.8 billion Grayscale Ethereum Trust ETF is traded under the ticker symbol ETHE, while the $955 million Grayscale Ethereum Mini Trust ETF has the ticker ETH.
In addition to the two Grayscale ether ETFs, the SMRS 13F filing for the quarter ended Sept. 30 also reflected 110,000 shares valued at nearly $7 million of the ARK 21Shares Bitcoin ETF. The number of shares held of that ETF, known by the ticker symbol ARKB, was unchanged from SMRS’s 13F filing for the quarter ended June 30.
The SMRS 13F filing came on the heels of a 13F holdings report filed by Emory University, which revealed an investment in the Grayscale Bitcoin Mini Trust ETF. That ETF, known by the ticker symbol BTC, was listed on July 31 and currently has about $2.3 billion in assets, according to Grayscale’s website.
Emory University’s 13F for the quarter ended Sept. 30, filed Oct. 25, showed that it held nearly 2.7 million shares of the Grayscale Bitcoin Mini Trust ETF valued at about $15.1 million. The Emory University investment marked the first time Balchunas has seen an endowment invest in a spot bitcoin ETF, he said.
Among the various types of institutional investors, “all of them are represented in the (spot) bitcoin ETF holdings now, endowment was the one missing,” he said.
“That’s amazing,” Balchunas added. “Usually, it takes ETFs like four or five years to complete the cycle, if you will, of institutions.”
The price of bitcoin hit a record $75,000 as former President Donald Trump defeated Vice President Kamala Harris in the U.S. presidential election.
A spokesperson for Emory University, whose endowment has a value of about $10.8 billion, declined to comment beyond the SEC filing.
Asked to comment regarding the SMRS investment in the two Grayscale spot ether ETFs, a Michigan Department of Treasury spokesman “won’t be able to discuss our investment strategy.” The SMRS had $110.5 billion in pension assets as of Sept. 30, he said
