Ethereum exchange-traded funds (ETFs) marked a milestone with their first state pension fund investment as the State of Michigan acquired $10 million worth of Ethereum-based ETFs from Grayscale, according to a recent SEC filing. This allocation places Michigan among the top five institutional holders of Grayscale’s Ethereum ETF products.
Michigan’s latest Form 13F revealed its significant investment in Grayscale’s ETH and ETHE products, positioning the state fund’s Ethereum holdings notably higher than its Bitcoin ETF assets. According to Bloomberg’s senior ETF analyst Eric Balchunas, Michigan’s pension fund allocated $10 million to Ethereum ETFs, surpassing its $7 million position in Bitcoin ETFs—a surprising move given the recent outperformance of Bitcoin relative to Ethereum.
Balchunas highlighted this strategic positioning, noting, “Not only did Michigan’s pension buy Ether ETFs, but they bought more than they did of Bitcoin ETFs… a pretty big win for Ether, which could use one.”
The broader cryptocurrency community responded with mixed reactions to Michigan’s pioneering investment in ETH ETFs. While some industry insiders saw this as a bullish sign for Ethereum, others critiqued the state fund’s relatively lower allocation to Bitcoin ETFs, despite Bitcoin’s stronger performance.
Rug Radio creator Daito Yoshi remarked on the decision, likening it to a calculated bet on Ethereum’s future growth potential. “Other institutions may consider similar strategies to capture BTC gains before prices climb further,” Yoshi commented on X, alluding to possible moves from other government-backed funds to balance their crypto ETF portfolios.
As crypto ETFs gain popularity, Bitcoin funds remain dominant, managing over $70 billion compared to Ethereum ETFs, which hold under $10 billion in assets. However, institutional investment interest in crypto ETFs overall continues to surge, with traditional finance firms channeling around $13 billion into Bitcoin ETFs this year alone.