Jersey City Mayor Invests in Bitcoin

Jersey City Mayor Steven Fulop has made headlines by announcing the city’s government will invest in Bitcoin through municipal pension funds. In a social media update, Fulop, who is running for state governor, revealed that an undisclosed sum will be allocated to Bitcoin exchange-traded funds (ETFs).

In an interview with The Block, Fulop, a former trader for Citi and Sanford Bernstein, explained that the investment serves as a hedge against inflation, stating, “It’s been very, very difficult over the last couple of years, and it seems like it’s getting worse, not better.” He views Bitcoin as an important asset class that will become commonplace in government and corporate investments.

Fulop joins other politicians recognizing Bitcoin’s potential as an inflation hedge. For example, the State of Wisconsin Investment Board recently allocated about $160 million into Grayscale and BlackRock’s Bitcoin ETFs. Similarly, Senator Cynthia Lummis is working on a bill to require the U.S. central bank to invest in Bitcoin as a treasury asset.

In recent years, a bipartisan group of politicians has embraced the crypto industry, with former President Trump shifting his stance to garner support from pro-crypto voters.

As a Democratic candidate aiming to replace Governor Phil Murphy, Fulop expressed interest in New Jersey potentially holding Bitcoin and attracting crypto firms to the state. Currently, several large crypto companies operate in Jersey City, which is conveniently located near Wall Street.

Fulop emphasized the need for broader discussions involving public and private stakeholders to make the investment a reality. John Metro, Jersey City’s business administrator, also supports exploring Bitcoin as a pension investment and plans to appoint board members who understand and support Bitcoin.

While the specific amount for the pension fund’s investment remains undisclosed, Fulop is looking to Wisconsin’s model as a potential guide, which allocated about 0.1% of its assets into Bitcoin ETFs. Jersey City’s pension plan will initially invest in Fidelity and BlackRock’s spot Bitcoin ETFs.

Additionally, although Fulop personally holds Ether (ETH), he noted that the city is not yet looking into Ethereum ETFs. There are various public finance laws governing the city’s investment abilities, which require discussions with the city council before proceeding with direct Bitcoin holdings.

Summary: Jersey City Mayor Steven Fulop announced plans to invest municipal pension funds in Bitcoin ETF, viewing it as an inflation hedge amid rising living costs.