The State of Michigan Retirement System's New Crypto Holdings

The State of Michigan Retirement System has revealed a new holding in Grayscale’s Ethereum exchange-traded fund, becoming the first pension fund to do so since the ETH-based financial instrument began trading in July.

The Michigan pension agency disclosed in a 13F filing that it held 460,000 shares of the Grayscale Ethereum Trust (ticker: ETHE), valued at about $10 million as of the end of the third quarter, making it a top-five holder of the fund, according to VanEck's Matthew Sigel. It also disclosed holdings of 460,000 shares of the Grayscale Ethereum Mini Trust ETF (ETH), valued at about $1.1 million.

U.S. states and pension funds have repeatedly demonstrated an appetite for investing in crypto and crypto-related products. In May, it came to light that the State of Wisconsin Investment Board held nearly $100 million of the spot bitcoin exchange-traded fund issued by BlackRock. Last week, Florida’s chief financial officer said the state holds about $800 million in “crypto-related” investments and could grow depending on who wins the upcoming presidential election.

The State of Michigan Retirement System has previously disclosed it owned about $7 million worth of spot bitcoin ETF holdings.

Big Win for Ether

Not only did Michigan's pension buy ether ETFs, but they bought more than they did of bitcoin ETFs, $10 million vs $7 million, this despite BTC being up a ton and ether in the gutter. Bloomberg Senior ETF Analyst Eric Balchunas said in a post to X, "Pretty big win for ether which could use one."

Pension funds investing in crypto dates back to at least 2021.

Earlier this year, London-based Nickel Digital research said that institutional investors and wealth managers with crypto holdings were planning to increase their investments in crypto. Nickel Digital said at the time that around 74% of institutional investors and wealth managers with digital asset exposure planned to increase their investment levels.