Michigan State Pension Triples Bitcoin ETF Exposure, Latest Filing Shows

The State of Michigan Retirement System has tripled its Bitcoin exposure, reporting 300,000 shares of the ARK 21Shares Bitcoin ETF, valued at $11.4 million in the second quarter. That’s an increase from 100,000 shares previously reported as of March 31, according to a 13F form filed Monday with the U.S. Securities and Exchange Commission. The pension fund, overseeing $19.3 billion in assets, now holds significant positions in both Bitcoin and Ethereum–linked investment products.

“Pension funds operate based on rules around the circulating market cap of any asset, potential upside, and max drawdowns, Ganesh Mahidhar, investment professional at Further Ventures, told Decrypt. “In other words, through careful monitoring of Sharpe ratios, Bitcoin has been on that radar for a while now, and that is what we see being reflected in these purchases.” 

A Sharpe ratio is a metric helping funds evaluate how much return they’re getting for the risk they’re taking. “Purchases remain carefully optimistic, and constitute less than 0.1% of their cash portfolio,  protecting themselves against significant drawdowns,” Mahidhar said. Apart from the Bitcoin ETF, the fund maintains a separate crypto position through 460,000 shares of the Grayscale Ethereum Trust (ETHE), valued at approximately $13.6 million, which has remained constant since September 2024.

State pension funds nationwide are increasingly allocating to digital assets, with the State of Wisconsin’s Investment Board now owning over 6 million shares of BlackRock’s iShares Bitcoin Trust (IBIT) fund worth $387.3 million. Even still, Bitcoin ETFs have experienced four consecutive days of outflows totaling $1.4 billion, according to Farside Investors data. However, ARKB saw outflows only once during the four-day stretch, with a $5.1 million exit last Friday.

Standard Chartered projects Bitcoin reaching $200,000 by year’s end, with pension funds expected to drive much of this growth. “We expect institutional flows into Bitcoin in 2025 to exceed 2024 levels, with fresh capital likely to come from long-only funds classified as ‘pension funds’,” the multinational bank said in a February report. “If positive action does come, as we expect, we think institutional flows will continue,” it said.