Last quarter, the New Jersey Pension Fund invested heavily in two bitcoin mining giants. For institutional investors, the step is a small step, but perhaps something much bigger. There is a hunger for bitcoin exposure at its highest levels, but mere possession of the asset could be too risky or inconvenient for some of these big players. And until the U.S. government approves the long-awaited Bitcoin ETF, miners will offer a much safer destination.
Related reading | Marathon Digital Holdings reported a 17% increase in bitcoin mining
According to Coindesk:
The state-administered pension ended in June at $ 3.66 million in Riot Blockchain (NASDAQ: RIOT) and $ 3.39 million in Marathon Digital Holdings (NASDAQ: MARA), according to disclosure documents.
New Jersey’s Common Pension Fund D has total assets of $ 30 billion for government employees.
The intent of the New Jersey Pension Fund is clear, and they put their money where their lips are. However, is there a reason that explains why they don’t want to hold the asset? A legal reason perhaps? The polemical Michael Saylor explains their rationale in this tweet:
Many institutional investors find listed Bitcoin miners attractive investments because they want exposure to BTC but prefer to hold securities rather than real estate for tax, accounting, and business reasons.
So there are several reasons besides Bitcoin’s volatility. Still there is hunger.
RIOT price chart on Nasdaq | Source: RIOT on TradingView.com
Is Bitcoin Feasible as an Institutional Investment?
Bitcoin is maturing and spreading. The bibliographic record is the same one NewsBTC used three years ago in an article that concluded that the asset wasn’t ready. We said:
In its current condition, the market is highly speculative with the majority of investors looking for easy money. Institutional investors have seen this and have mostly shied away from opening their wallets to the industry. These investors are looking for long-term returns to keep consumer confidence over time rather than making money quickly.
The tables turned. The situation has changed. Right now we are in an era where some of the more innovative institutions have already invested and driven the price to insane all-time highs … only to take their profits and drop them again. In any case, Bitcoin has proven itself as an institutional investment. Regarding this situation, NewsBTC said:
Those wealthy players with decades of market experience and all sorts of tactics on their side were instrumental in driving prices up to $ 60,000 per coin. Unfortunately, the data above suggests that they were also instrumental in the sell-off that left retailers with bloody consequences.
Related reading | Brazil approves Bitcoin ETF – SkyBridge files for itself
What about a Bitcoin ETF? Is that in the cards?
The only remaining unexplored factor is the possibility of a Bitcoin ETF in the US. As you know, all financial institutions and their mothers have applied, and some of them have already been turned down. NewsBTC quoted Hester Pierce, commissioner for the Securities and Exchange Commission (SEC), who said of the situation:
(Institutions) want access to crypto through a regulated market. It makes sense that we think about how to do that (…). We dug ourselves into a small hole. Lots of people are looking for a way to access the asset class. We waited a long time for this type of product to be approved.
Unfortunately we are still waiting for us.
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