The State of Wisconsin Investment Board is the first public institution in the country to invest in cryptocurrency.

The board has invested a total of $187.1 in funds and companies associated with bitcoin and other cryptocurrencies, according to a May 14 quarterly filing with the U.S. Securities and Exchange Commission.

The State of Wisconsin Investment Board manages the assets of the Wisconsin Retirement System, the State Investment Fund, and other funds.

The investment in cryptocurrency represents only a small share ‒ about one-tenth of 1% ‒ of the the State of Wisconsin Investment Board's more than $156 billion in assets as of the end of 2023.

As such, it's a relatively small, yet speculative bet, said Bob Bukowski, managing partner of Alpha Investing Consulting, a Milwaukee-based advisor for pension programs, endowments and large retirement plans.

Burkowski said the investment board would likely be asked, "why didn't you have any of that?" if bitcoin doubles or triples in value, and the investment board had not invested in cryptocurrency.

"And then on the other side of it, if it goes to zero, one tenth of 1% is kind of meaningless to them," Bukowski said. "To me this doesn't look like a full-size position, it looks like, 'we need to have some of this so that if it does work, we look good.'"

He said an investment of 1% or 5% would make it a considerable bet on cryptocurrency.

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SEC opens door with approval of cryptocurrency ETFs

With it's May 14 SEC filing, the State of Wisconsin Investment Board became the first public institution to make public its investment in cryptocurrency.

Its largest investment was $99.1 million in iShares Bitcoin Trust, an exchange-traded fund managed by BlackRock, the largest asset manager in the world with more than $9.1 trillion in assets under management. An exchange-traded fund is a collection of stocks, bonds or other investments that can be traded like a stock.

At the end of March, the trust had nearly $17.8 billion in bitcoin and $140,552 in cash. The increase in buying bitcoin coincides with the SEC allowing cryptocurrency funds to be traded.

Blackrock launched  iShares Bitcoin Trust in January after the SEC approved trading of bitcoin-based ETFs. The fund had nearly $17.8 billion invested in bitcoin by the end of March. The fund closed at $38.98 on Tuesday, up about 46% from its January launch.

In a Twitter post, Bloomberg Senior ETF Analyst Eric Balchunas said other public institutions will likely follow the board's lead.

"Wow, a state pension bought $IBIT in first quarter. Normally you don't get these big fish institutions ... for a year or so (when the ETF gets more liquidity) but as we've seen these are no ordinary launches. Good sign, expect more, as institutions tend to move in herds," he wrote.

When reached for comment on its cryptocurrency investment, the board stated it “does not comment on specific investments.”

In addition to the investment in bitcoin through BlackRock, the state's cryptocurrency investments include:

• $63.6 million in Grayscale Bitcoin Trust. Grayscale has about $35 billion in assets.

• $24.5 million in Coinbase, a cryptocurrency exchange platform that allows users to buy and sell different cryptocurrencies.

SEC Chair Gary Gensler said in a statement in January that allowing bitcoin-based ETFs should not be seen as an SEC endorsement of cryptocurrency.

"Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto," Gensler said.

Trading cryptocurrency has been likened to trading a commodity like oil or metals, but Gensler noted those materials have industrial uses.

"While in contract, bitcoin is primarily a speculative, volatile asset that's also used for illicit activity including ransomware, money laundering, sanction evasion and terrorist financing," Gensler said.

Bukowski said having the SEC involved is a way to protect investors.

"They need to have a placeholder to say, 'We need to monitor it because we said it's ok to (trade) it,'" Bukowski said. "Now they get to go into BlackRock, they get to go into Grayscale and say, 'Ok, how are you handling this? How are you buying it? How are you selling it?'... all those kinds of questions, now the SEC has authority."

Bitcoin has traded between $66,685 per coin and $70,314 over the last five days. On Wednesday it closed at $68,305.

This article originally appeared on Milwaukee Journal Sentinel: Wisconsin investment board pours millions into cryptocurrency funds