Houston Firefighters Pension Fund Becomes the First US Public Pension Fund to Invest in Cryptocurrencies; a decision that could be vital for the Bitcoin market.
Many important milestones took place for America’s digital currency ecosystem this week. For the first time, a public pension fund in that country is openly investing in cryptocurrencies.
The news arrived the same week that Bitcoin’s first exchange-traded fund (ETF) debuted on the US stock market and right after the asset broke a new price record.
The Houston Firefighters Pension Fund, which manages about $ 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 the CryptoWorld
The Houston Fire Relief and Retirement Fund (HFRRF) allocated USD 25 million to purchase BTC and ETH. According to the report, the Texas-based fund turned to the New York Digital Investment Group, or NYDIG, to consolidate the purchase.
The institutional provider will also bring 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 decision makes the Houston Fire Fund the first public pension fund in the US to announce an investment in digital currencies; The fund’s chief investment officer, Ajit Singh, highlighted his confidence in the investment.
Texas public records highlight that the pension fund had close to $ 4.1 billion in total net assets like the net assets of June 2020. The group has allocated approximately 0.6% of its portfolio to digital assets. The fund is now responsible for the benefits of more than 6,600 active and retired firefighters, as well as surviving family members.
The Decisive Moment for Bitcoin in Public Pensions
HFRRF’s announcement arrives amid a bullish rally for the cryptocurrency market that has seen Bitcoin trading above $ 66,000 and Ethereum above $ 4,200, their best prices to date.
The increase has received fuel by the launch of the first Bitcoin futures ETF 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 the pension fund wanted to hold direct tokens rather than take the risk related to derivatives market investments.
Both State and local government pension funds are a powerful force in investment; These pensions could generate a more relevant impact on the cryptocurrency market, as they oversee at least $ 5.5 trillion in assets or more, according to the National Association of State Retirement Administrators.
Long-Term Potential and the Constant Rise of the Market
The unprecedented investment in the United States of America has the potential to benefit HFRRF’s more than six thousand members significantly in the long term if Bitcoin continues to appreciate against the dollar as it has throughout its history.
The Bloomberg report added that two other Virginia pension funds acquired cryptocurrencies for the first time in 2019 and recently plan to expand their investments by another $ 50 million.
In June, retirement plan provider, ForUsAll gave its clients the option to allocate up to 5% of their portfolio to cryptocurrencies, arguing that US citizens could be at a “disadvantage” if not given the chance of accessing digital currencies in their retirement plans.
By: Jenson Nuñez
