Bitcoin ETF: Shocking $355M Sell-Off by Wisconsin Investment Board

In a surprising move that has captured attention in the financial world, the Wisconsin Investment Board, responsible for managing the state’s retirement funds, has completely divested from its substantial **Bitcoin ETF** holdings. This development comes just months after the board was lauded as one of the first state-level entities to embrace cryptocurrency exposure for its retirees.

Wisconsin Investment Board Liquidates Significant IBIT Position

According to recent filings with the US Securities and Exchange Commission (SEC) dated May 15, the State of Wisconsin Investment Board (SWIB) reported zero positions in spot **Bitcoin ETF**s as of the end of the first quarter of 2024. This means the board liquidated its entire holding of 6,060,351 shares in BlackRock’s iShares Bitcoin Trust ETF (IBIT).

Based on current market prices, these liquidated shares were valued at approximately $355.6 million. This represents a significant shift, especially considering SWIB’s earlier pioneering stance.

Context: State Retirement Funds and Cryptocurrency Investment

The move is particularly notable because the **Wisconsin Investment Board** was among the initial state investment funds in the U.S. to publicly disclose a significant purchase of **Bitcoin ETF**s. They acquired $164 million worth of Bitcoin ETFs in Q1 2024, the same quarter these products launched. Furthermore, SWIB had previously held shares in the Grayscale Bitcoin Trust (GBTC) and reallocated 1 million of those shares into IBIT during Q4 2023.

Before the sell-off, the **IBIT** holdings represented a relatively small portion of SWIB’s overall portfolio. The board managed more than $166 billion in assets at the end of 2023, meaning the Bitcoin ETFs accounted for roughly 0.2% of their total holdings.

Understanding the Implications for State Retirement Funds

While the filing confirms the sale, it doesn’t explicitly state the reasons behind the decision. Potential factors could include portfolio rebalancing, profit-taking after the rally earlier in the year, or a change in investment strategy. For other **State Retirement Funds** watching the space, this action by a previously proactive participant could spark further debate or caution regarding direct **Cryptocurrency Investment** exposure.

Contrasting Trends: IBIT Performance and Other Institutional Moves

Interestingly, the sell-off by the **Wisconsin Investment Board** contrasts with actions taken by other large investors during the same period. For instance, the Abu Dhabi sovereign wealth fund, Mubadala, increased its IBIT holdings in Q1, adding 491,439 shares to reach a total of 8,726,972 shares, valued at around $512 million as of March 31.

Furthermore, IBIT itself has shown robust performance and investor interest. It recently surpassed the $45 billion mark in net inflows and had a remarkable 20-day streak of positive net inflows, which only ended shortly before the filing date. IBIT has not seen an outflow since early April, highlighting strong general demand for the product despite individual large sales like Wisconsin’s.

Key Takeaways on State Investment in Bitcoin ETF

This event provides several key points for observation:

• A major **State Retirement Funds** manager fully exited its **Bitcoin ETF** position after a short holding period.
• The scale of the sale ($355M+) is significant, even if it was a small percentage of the total portfolio.
• The move happened in Q1 2024, a period that also saw other institutions increasing their **Cryptocurrency Investment**.
• It raises questions about the long-term strategies of state-level investment boards regarding volatile assets like Bitcoin.

Summary: What Does This Mean for Future State Retirement Funds?

The decision by the **Wisconsin Investment Board** to sell off its entire **IBIT** stake is a notable development in the landscape of institutional **Cryptocurrency Investment**. While it doesn’t necessarily signal a widespread retreat by all **State Retirement Funds**, it highlights the cautious and potentially tactical approach these large, risk-averse entities may take with novel asset classes. It serves as a reminder that institutional adoption isn’t a one-way street and can involve portfolio adjustments based on market conditions, regulatory considerations, or internal strategy shifts. The market will be watching to see if other state funds follow suit or if Wisconsin’s move remains an isolated case.