Michigan Pension Fund Triples Bitcoin Holdings in Q2
DETROIT, MI – The Michigan Retirement System (MERS), overseeing nearly $19.3 billion in assets, has significantly increased its exposure to Bitcoin, tripling its position in the ARK 21Shares Bitcoin ETF during the second quarter, according to recently filed SEC documents.
Expanded Exposure
The pension fund now holds 300,000 shares of the ARK 21Shares Bitcoin ETF, valued at approximately $11.4 million. This represents a substantial increase from the 100,000 shares held at the end of Q1. Additionally, MERS maintains a $13.6 million investment in Grayscale’s Ethereum Trust (ETHE), unchanged since September 2024.
Institutional Optimism Persists Despite ETF Outflows
While Bitcoin ETFs have recently experienced $1.4 billion in net outflows over four consecutive days, institutional interest remains steady. The ARK Bitcoin ETF saw minimal outflows ($5.1 million) during this period compared to the broader market.
Investment professionals attribute this cautious optimism to factors like market cap rules, potential upside, and risk management metrics like drawdowns and Sharpe ratios. “Purchases remain carefully optimistic,” explained Ganesh Mahidhar, an investment professional, noting Bitcoin exposure typically constitutes less than 0.1% of institutional cash portfolios.
Broader Trend Among State Pension Funds
The trend toward institutional adoption of Bitcoin is expanding beyond Michigan. The State of Wisconsin’s Investment Board now holds over $387 million in BlackRock’s iShares Bitcoin Trust.
Positive Outlook for Institutional Flows
Despite recent volatility, institutions appear poised to drive significant Bitcoin adoption. Standard Chartered Bank recently forecasted Bitcoin potentially reaching $200,000 by year-end and predicted institutional flows in 2025 would exceed those of 2024, drawing capital from “long-only funds classified as pension funds.”
