The Michigan Retirement System has diversified its crypto holdings, investing $10 million in Grayscale’s Ethereum Trust.
The State of Michigan Retirement System, which is responsible for managing $13.6 billion in pension fund assets, has initiated diversifying its crypto holdings in the wake of its entrance into the asset class earlier this year.
The state fund disclosed in a 13-F disclosure submitted to the Securities and Exchange Commission on Monday that it had acquired shares valued at $10 million from Grayscale’s Ethereum Trust (ETHE).
Although the securities regulator approved Bitcoin many months in advance, the fund now possesses more Ethereum than Bitcoin. This is a surprising development.
According to Monday’s records, the fund acquired an additional $1.1 million in shares from the Ethereum Mini Trust of the digital asset manager.
It is also the first U.S. state pension fund to invest in Ethereum ETFs, which gives crypto enthusiasts confidence that the asset is becoming more ingrained in the traditional financial world.
This acquisition follows the fund’s recent acquisition of $6.6 million in ARK 21Shares Bitcoin ETF in July, which was made in response to the SEC’s regulatory approval of the asset class for the investment vehicle in January.
Grayscale holds ETHE as a fraction of Ethereum’s ownership on behalf of the trust’s shareholders. Each share provides indirect exposure to Ethereum’s performance without requiring direct ownership.
ETHE has encountered substantial net outflows since its conversion to an ETF in July 2024. Grayscale’s premier Ethereum fund experienced outflows of $484 million on its inaugural trading day, and by early August, the total outflows had surpassed $2 billion, according to data from SoSoValue.
BlackRock, Fidelity, and Bitwise have all but intensified competition, particularly in terms of fees, with the introduction of multiple spot US-based Ethereum ETFs this year.
ETHE charges 2.5%; however, BlackRock (ETHA) and Fidelity (FETH) are anticipated to impose fees of 0.12% and 0.25% upon the expiration of their fee waiver on December 31.
