Finance expert David Krause has praised Wisconsin’s bold decision to invest in Bitcoin and predicts that more US states will follow suit. Although Wisconsin’s initial investment was only $180 million, Krause believes that this is just the beginning and that the state will continue to allocate more funds to Bitcoin exchange-traded funds (ETFs).
Three weeks ago, the State of Wisconsin Investment Board (SWIB) became the first in the US to invest in Bitcoin through Grayscale and BlackRock ETFs. According to a financial expert at a local university, this investment is just the first of many, and it will inspire other state funds to invest billions in Bitcoin ETFs.
In a recent interview, David Krause discussed the impact of Wisconsin’s investment on the crypto world. Krause, a professor emeritus at Marquette University, praised the state’s move and stated that most people did not expect institutional involvement in Bitcoin investing for several years.
Krause explained that Wisconsin was in a favorable position to invest in BTC due to its fully funded pension fund. Unlike other states, such as Illinois, which only has a 50% funded pension fund, Wisconsin can afford to invest for the long term without worrying about liquidity.
Despite criticism from the traditional finance sector about Bitcoin’s volatility, Krause argued that most assets, including stocks, are volatile. He pointed out that even a biopharmaceutical firm like Janux Therapeutics has experienced significant volatility, with a 412% year-to-date gain compared to Bitcoin’s 63% gain in the same period.
Krause believes that Bitcoin’s supply and demand are starting to balance out, and the investment community is increasingly recognizing it as a viable alternative investment.
Bitcoin is currently trading at $69,000, showing a minimal decrease of less than 1% in the past day as the overall crypto market enters a consolidation phase.
Looking ahead, Krause predicts that more states will invest in Bitcoin, but initially, it will be limited to states with well-funded pension funds like Wisconsin’s. With Wisconsin’s fund managing approximately $156 billion, its investment in BTC only accounts for a negligible 0.1% of its portfolio.
Krause sees this initial investment as a testing ground to gauge public reaction and resistance to Bitcoin ownership. He believes that the impact on the portfolio will be more substantial when the positioning reaches 1% or 2%.
In conclusion, Krause’s expert opinion supports the notion that Wisconsin’s investment in Bitcoin is a significant step forward and that other states will likely follow suit in the future.