Multi-Billion Dollar UK Pension Fund Cartwright Dives into Bitcoin with 3% Allocation

• The world of finance is witnessing a transformative phase after a UK pension fund Cartwright adopted 3% of Bitcoin as a direct investment.
• Corporations and pension funds have been the first non-asset management institutions to capitalize on Bitcoin, it is expected that larger entities like sovereign wealth funds, and nation-states are next.

Bitcoin is on the brink of a new epoch that could start a trend for institutional investors in the United Kingdom. According to the Corporate Advisor’s report, Cartwright, a specialist in British pension funds and scheme advisory, has declared the allocation of Bitcoin within a defined benefit (DB) portfolio.

This allocation signifies confidence in Bitcoin’s potential as a viable long-term asset. Cartwright’s pension fund will allocate approximately 3% of its portfolio to Bitcoin, a notable strategic move in the rather conservative world of pension fund investments. By incorporating Bitcoin, Cartwright aims to bolster its portfolio against inflationary pressures, particularly in an environment characterized by low interest rates.

In the report, Cartwright’s director of investment consulting Sam Roberts highlighted that trustees are actively seeking innovative solutions to safeguard their pension schemes amid economic challenges. He described the decision to allocate funds to Bitcoin as a strategic move that not only enhances diversification but also engages with an asset class characterized by a distinct risk-return profile. Additionally, he underscored that incorporating Bitcoin into the investment strategy signifies a progressive approach by the trustees, demonstrating their commitment to adapting to the evolving financial landscape.

Daniel Batten, a Bitcoin writer, stated on X that Cartwright’s 3% allocation is 30 times greater than the $164 million investment by the Wisconsin Investment Board. For context, Crypto News Flash reported that the State of Wisconsin Investment Board purchased over $99 million in shares of a Bitcoin exchange-traded fund (ETF) from the major investment firm BlackRock between January 1 and March 31. Additionally, the Investment Board, often referred to as SWIB invested approximately $64 million in a separate Bitcoin ETF offered by Grayscale. 

 Adoption for Ethereum ETF Increases

The State of Michigan Retirement System has revealed an investment exceeding $11 million in spot Ethereum (ETH) exchange-traded funds (ETFs) in its recent filing. This move makes Michigan the first state to invest in Ethereum, surpassing its earlier $6.6 million investment in spot Bitcoin ETFs in July 2024.

As of September 30, the Michigan pension fund held 460,000 shares of the Grayscale Ethereum Fund, valued at around $10 million, as well as 460,000 shares in the Ethereum Mini Trust, totaling approximately $1.1 million. This positions the state pension fund as the fourth and second-largest holder of these funds’ shares, respectively.

For pension funds, which are tasked with ensuring long-term financial health for their beneficiaries, Bitcoin and Ethereum present unique opportunities to diversify and potentially enhance returns. As of now, Bitcoin trades at $68,916 reflecting a 0.25% increase over the past day, though it has seen a slight decrease of 2.71% over the past week. Short-term fluctuations are expected, but the long-term outlook for Bitcoin ETFs remains positive, fueled by increasing adoption and institutional interest.