- Last quarter, a pension fund in New Jersey chased crypto mining’s gains with multimillion-dollar wagers on two of the industry’s top names
- New Jersey’s Common Pension Fund D has a total asset value of $30 billion for state employees
- A request for comment was not immediately returned by the NJ Division of Investment
The New Jersey Pension Fund made significant investments in two Bitcoin mining behemoths last quarter. For institutional investors, the move may be a small step toward something much bigger. At the highest echelons, there is a desire for Bitcoin exposure, but simply owning the asset may be too dangerous or inconvenient for some of those huge players. Miners are also a much safer target until the US government approves the long-awaited Bitcoin ETF.
The intention of the New Jersey Pension Fund is obvious, and they are willing to put their money where their mouth is. Is there, on the other hand, a reason why they don’t wish to keep the asset? Maybe there’s a legal explanation behind it? In this tweet, Michael Saylor explains their reasoning: Because they want BTC exposure yet prefer to hold securities rather than property due to tax, accounting, and business issues, many institutional investors find publicly traded Bitcoin miners to be appealing investments.
Is Bitcoin a Good Investment For Institutions?
Bitcoin is developing and gaining traction. The title sentence is the same as it was three years ago in an article that concluded that the asset was not ready. The market is currently very speculative, with the bulk of investors wanting to make a quick buck, according to the report. Institutional investors have taken notice of this and have largely avoided investing in the industry. Rather than making a quick buck, these investors are seeking long-term returns and building consumer confidence.
The tables had been turned. The situation had shifted. We are currently in a period in which some of the more forward-thinking institutions have already invested and driven the price to an incredible all-time high… only to take their profits and let the price sink again. In any case, Bitcoin is proven to be a viable investment option for institutions. These high-net-worth individuals, who have decades of market knowledge and a variety of strategies at their disposal, were critical in driving prices up to $60,000 a coin. Regrettably, the data reveals they were also involved in the selloff that resulted in a bloodbath among ordinary traders.
What About a Bitcoin Exchange-Traded Fund (ETF)? Is That a Foregone Conclusion?
The possibility of a Bitcoin ETF in the United States is the sole factor that has yet to be investigated. As you may be aware, every financial institution and their mothers applied, and some were previously turned down. It reported Hester Pierce, Commissioner of the Securities and Exchange Commission (SEC), as saying on the situation, (Institutions) want access to crypto through a regulated market. It makes sense for us to think about how we can do that. They’ve put themselves into a bit of a quagmire. A lot of people are trying to figure out how to get into the asset class. They took a long time to approve a product like this.