The Houston firefighters’ pension fund is dipping its toes into bitcoin

The Houston Firefighters’ Relief and Retirement Fund claimed it invested $25 million in Bitcoin and Ether through NYDIG, a Bitcoin-focused subsidiary of asset management Stone Ridge.

Ajit Singh, the fund’s chief investment officer, stated: “I see this as another tool to manage my risk. It has a positive expected return and it manages my risk. It has a low correlation to every other asset class.”

As per the National Association of State Retirement Administrators, state and local government pension systems are a significant force in investing, handling more than $5.5 trillion in assets. Though they’ve been hesitant to join the speculative craze around cryptocurrency as custodians of taxpayer dollars, Houston’s move isn’t unusual. For example, two Virginia pension funds, which initially purchased digital assets two years ago, recently announced plans to increase their holdings by $50 million.

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With Bitcoin hitting fresh highs on Wednesday and having more than doubled since the start of the year, some institutional investors are reconsidering their stance on the cryptocurrency. The rise this week, which took Bitcoin beyond $66,000, was fueled by hopes that the introduction of the first futures exchange-traded fund for the currency in the United States would lead to wider use.

Singh stated that he favored direct tokens to take on the risk of futures-related investments.

We didn’t want to get the synthetic exposure,” he stated. “We decided to go directly to the token. As more and more institutional adoptions happen, there will be more and more dynamics that develop for supply and demand. And having physical assets — actual tokens — gives us in the future the possibility of income generation potential.” 

The Houston fund covers over 6,600 active and retired firemen and their family members. Active firefighters have been donating 9% of their salaries to the fund since 2004, with Houston contributing at least twice that amount.

Singh believes that his cryptocurrency investment will bring up good results.

“We have been studying this as an asset class to add to our investment portfolio for quite some time; we were watching it, we were analyzing it,” he said. “It became an asset class we could not ignore anymore.” 


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