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In summary
- The State of Michigan Retirement System has begun diversifying its Cryptocurrency holdings, acquiring $10 million in shares of the Grayscale Ethereum Trust (ETHE).
- The fund now owns more Ethereum than Bitcoin, even though Bitcoin was approved by the securities regulator first.
- This move marks the first US state pension fund to invest in Ethereum ETFs, reinforcing confidence in the asset in the traditional financial world.
The Michigan State Retirement System, which oversees $13.6 billion in pension fund assets, has begun diversifying its cryptocurrency holdings after dabbling in the asset class earlier this year.
In a 13-F disclosure filed Monday with the Securities and Exchange Commission, the state fund revealed that it has acquired $10 million in shares of the Grayscale Ethereum Trust (ETHE).
What is surprising is that the fund now owns more Ethereum than Bitcoin, even though the latter was first approved by the securities regulator many months earlier.
Filings on Monday show the fund additionally acquired $1.1 million in shares of the digital asset manager’s Ethereum Mini Trust.
It also marks the first US state pension fund to invest in Ethereum ETFs, giving cryptocurrency enthusiasts confidence that the asset is becoming more entrenched in the traditional financial world.
The move follows the fund’s recent purchase of $6.6 million in the ARK 21Shares Bitcoin ETF in July, which followed the SEC’s regulatory approval of the asset class for the investment vehicle in January.
ETHE represents fractional ownership of Ethereum held by Grayscale on behalf of the trust’s shareholders. Each share provides indirect exposure to Ethereum performance without the need for direct ownership.
ETH has seen significant net outflows since its conversion to an ETF in July 2024. On its first day of trading, Grayscale’s flagship Ethereum fund saw outflows of $484 million, and in early August, total outflows exceeded $2 billion, according to SoSoValue data.
The launch of several US-based Ethereum ETFs by several companies this year, including BlackRock, Fidelity, and Bitwise, has intensified competition, especially when it comes to fees.
While ETHE charges 2.5%, competitors BlackRock (ETHA) and Fidelity (FETH) are expected to charge 0.12% and 0.25% respectively, after the expiration of their scheduled fee waiver on December 31.
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