Jersey City Mayor Invests in Bitcoin

Jersey City Mayor Steven Fulop made headlines by announcing that the city government will invest in bitcoin as part of the municipal pension plan. In a social media post, Fulop, who is currently running for state governor, stated that an undisclosed amount will be allocated to bitcoin exchange-traded funds (ETFs).

In an interview with The Block, Fulop, a former trader at Citi and Sanford Bernstein, explained that this investment serves as a hedge against inflation. He remarked, “It’s been very, very difficult over the last couple of years, and it seems like it’s getting worse, not better,” referencing the rising cost of living.

Fulop emphasized that bitcoin is an “important and relevant asset class” that will soon become commonplace for governments to hold as a store of value.

Other politicians are also leaning into crypto as an inflation countermeasure. The State of Wisconsin Investment Board revealed earlier this year it placed about $160 million of its $156 billion in assets into Grayscale and BlackRock’s bitcoin ETFs for similar reasons.

Sen. Cynthia Lummis is working on a bill for the U.S. central bank to invest in bitcoin, and presidential candidate Robert F. Kennedy has pledged to urge the U.S. Treasury to acquire bitcoin equivalent to its gold holdings.

Former President Trump has shifted from skepticism to support of the crypto industry, making it an election topic to gain favor with crypto voters.

Mayor Fulop, a Democrat aiming to replace Governor Phil Murphy, expressed interest in having New Jersey hold bitcoin and attract crypto firms to the state. Several large crypto companies already have a presence in Jersey City.

He stated, “Obviously, we’re indicating with our actions that we’re supportive of the industry,” and highlighted the need for a broader discussion involving various stakeholders.

John Metro, Jersey City’s business administrator, who introduced the idea of investing in bitcoin for the pension, echoed Fulop’s sentiments on fostering support for the cryptocurrency.

While the specific amount for the investment is undisclosed, Fulop noted that the city is studying Wisconsin’s model, which invested a small percentage of its pension assets in bitcoin ETFs. Jersey City is initially focusing on Fidelity and BlackRock’s spot bitcoin ETFs.

Fulop mentioned that, although he personally holds ETH and BTC, the city is not yet exploring Ethereum ETFs. He acknowledged that public finance laws govern the city’s investment decisions, requiring dialogue with the city council before moving forward with bitcoin ownership.