Houston Firefighters Pension Fund Becomes First US Public Pension Fund to Invest in Cryptocurrencies; a move that could be decisive for the Bitcoin market.
Many important milestones for the US digital currency ecosystem this week. For the first time, a public pension fund in that country is investing in cryptocurrencies. The news comes the same week that the world’s first exchange-traded fund (ETF) debuted. Bitcoin on the US stock market, and shortly after the asset broke a price record.
The Houston Firefighters Pension Fund, which manages nearly USD $ 4 billion in assets, has allocated part of its portfolio to investing in Bitcoin (BTC) and Ethereum (ETH).
Houston pension fund takes a step towards crypto
As reported Bloomberg, the Houston Fire Relief and Retirement Fund (HFRRF) allocated a total of USD $ 25 million for the purchase of the two largest digital assets, BTC and ETH.
According to the report, the Texas-based fund turned to the New York Digital Investment Group, or NYDIG, to make the purchase. The institutional provider will also provide cryptocurrency custody services to the pension fund, which is why it has created a private fund to acquire and guard the assets on behalf of HFRRF.
The move makes the Houston firefighters fund the first public pension fund in the US to announce an investment in digital currencies. The fund’s chief investment officer, Ajit Singh, expressed his confidence in the investment in conversation with Bloomberg. He commented that the decision came after studying recent market growth:
We have been studying this as an asset class to add to our investment portfolio for quite some time; We were seeing it, we were analyzing it. It became an asset class that we could no longer ignore.
Texas Public Records show that The pension fund had close to USD $ 4.1 billion in total net assets as of June 2020, which means that the group has allocated approximately 0.6% of its portfolio to digital assets. The fund is responsible for the Benefits of more than 6,600 active and retired firefighters, as well as surviving family members.
Decisive moment for Bitcoin in public pensions
HFRRF’s announcement comes amid a bullish rally for the cryptocurrency market that has led to Bitcoin to be traded over USD $ 66,000 already Ethereum over USD $ 4,200, its best prices to date. The increase was driven by the launch of the first futures ETF of Bitcoin on the New York Stock Exchange earlier this week, and the approval of two other ETFs.
Despite having this new access to a futures-linked investment vehicle, Singh told Bloomberg that he pension fund preferred to keep the tokens direct, rather than assuming the risk associated with investments in the derivatives market. “We didn’t want to get the synthetic exposure. We decided to go straight to the coinHe said, adding:
As more and more institutional adoptions happen, there will be more and more dynamics that develop for supply and demand. And having physical assets, real tokens, gives us in the future the possibility of generating potential income.
In accordance with Bloomberg, state and local government pension funds are a powerful force in investment, and could have a major impact on the cryptocurrency market, as they oversee more than $ 5.5 trillion in assets, according to the National Association of State Retirement Administrators.
“This investment represents a watershed moment for Bitcoin and its place in public pensions.“said Nate Conrad, NYDIG’s global director of asset management. “Trustees are increasingly aware of how even a small allocation to digital assets can have a big impact over time, and now they have a partner at NYDIG who can help them achieve it.“.
Long-term potential, as the market continues to rise
The unprecedented investment in the United States has the potential to benefit HFRRF’s more than 6,000 members significantly in the long term if Bitcoin it continues to appreciate against the dollar as it has throughout its history.
The report of Bloomberg He added that two other pension funds in Virginia acquired cryptocurrencies for the first time in 2019 and recently plan to expand their investments by another $ 50 million. Also, most recently in June, the retirement plan provider ForUsAll gave his clients the option of allocate up to 5% of your portfolio to cryptocurrencies, arguing that US citizens could be in “disadvantage”If they are not given the option of accessing digital currencies in their retirement plans.
Meanwhile, the firefighters pension fund plans to further partner with NYDIG in the future to allow its benefactors to take advantage of the suite of services focused on bitcoins provided by the NYDIG platform, as highlighted by the media Bitcoin Magazine.
Hannah Estefanía Pérez’s version / DailyBitcoin
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