Michigan Pension Fund Diversifies Crypto Holdings, Buys $10M in Ether ETFs

The State of Michigan Retirement System, which manages $13.6 billion in pension assets, has begun diversifying its cryptocurrency investments.

In a recent filing with the Securities and Exchange Commission (SEC), the retirement fund disclosed that it has acquired $10 million worth of shares in Grayscale’s Ethereum Trust (ETHE).

Notably, this acquisition means that the Michigan fund now holds more Ethereum than Bitcoin, despite Bitcoin being approved for investment by regulators several months prior.

Michigan Fund Purchases Shares from Grayscale’s Ethereum Mini Trust

Alongside the investment in ETHE, the fund also purchased an additional $1.1 million in shares from Grayscale’s Ethereum Mini Trust, making it the first state pension fund in the U.S. to invest in Ethereum ETFs.

The step offers crypto enthusiasts a sense of confidence as it signals Ethereum’s growing acceptance in the traditional financial landscape.

The latest investment follows the fund’s earlier acquisition of $6.6 million in ARK 21Shares Bitcoin ETF in July, which came shortly after the SEC approved such investment vehicles.

🚨 First State Pension Fund Buys #ETH ETF 🚨

State of Michigan Files 13F Discloses New ETH ETF Holdings; Becomes Top 5 Holder of $ETH & $ETHE pic.twitter.com/3eYrCh3ldG

— matthew sigel, recovering CFA (@matthew_sigel) November 4, 2024

ETHE allows investors to gain exposure to Ethereum’s performance without needing to own the cryptocurrency directly, offering a fractional ownership model held by Grayscale.

However, the ETHE fund has faced challenges since its conversion to an ETF in July 2024, experiencing substantial net outflows.

Reports indicate that on its first trading day, ETHE saw outflows of $484 million, and total outflows reached over $2 billion by early August.

As the competition among Ethereum ETFs heats up, particularly with firms like BlackRock and Fidelity launching their own spot ETFs with significantly lower fees, the market dynamics are changing rapidly.

While ETHE charges a 2.5% fee, its competitors are expected to charge much lower rates once their fee waivers expire at the end of the year.

Semler Scientific Expands Bitcoin Holdings to Over 1,000

In related news, Semler Scientific, a healthcare technology firm, has acquired an additional 47 Bitcoins for $3 million, raising its total bitcoin holdings to 1,058.

The company announced this development alongside its third-quarter earnings, claiming that it plans to accumulate Bitcoin while simultaneously managing its healthcare operations.

Despite a 2.3% decline in stock price to $29.97 on Monday, Semler Scientific experienced a rebound with a 3.4% increase in after-hours trading.

Over the past month, the stock has appreciated by 18.1%, although it remains down 32.1% year-to-date.

In the third quarter alone, Semler purchased 141 Bitcoin for $8.4 million.

The move comes as the ongoing macroeconomic uncertainties, characterized by increasing inflationary pressures and geopolitical tensions, have prompted corporate treasurers to explore the inclusion of Bitcoin as a reserve asset.

Just recently, digital asset prime services platform Abra launched a service designed for corporates seeking to hold cryptocurrencies as reserve assets on their balance sheets.

Likewise, Japanese investment firm Metaplanet has been actively increasing its Bitcoin holdings since May, when it announced plans to use Bitcoin as a strategic treasury reserve.

Last month, the firm raised approximately 10 billion yen ($66 million) through a stock acquisition rights offering, attracting 13,774 individual shareholders.