Bitcoin Forum

The New Jersey State Pension Fund invested several million dollars in two large companies in the area, seeing the upward trend of cryptocurrency companies in the previous quarter.
The pension fund's capital management sector ended in June with an investment of $ 3.66 million in two blockchain companies (NASDAQ: RIOT) and a $ 3.39 million digital marathon holding (NASDAQ: MARA).
The New Jersey Joint Pension Fund has invested a total of $ 30 billion in the future of the state's employees.
This seems to be the first time this cryptocurrency allocation has been made by the organization in New Jersey. Other government pension funds, especially in California, have been considering investing in shares of bitcoin mining companies in recent months.
New Jersey Investment Division delayed responding to comment.


Source: https://www.coindesk.com/new-jersey-pension-invested-7m-in-bitcoin-mining-stocks-last-quarter

Well, that's a really risky investment considering that bitcoin is a volatile investment especially using pension as a capital for the investment. I hope that the investment will be fruitful though and I think it will bear big profit because it might need some time.

I think more and more institutions will invest in cryptocurrencies.
 As well-known investment institutions and listed companies choose to invest in Bitcoin, it will be normal for government agencies to join in.

This is a shitpost that I'm replying to, but you're right that it's risky.  However, I just took a look at the stocks in question (RIOT and MARA), and it looks like they've been performing pretty well since their inception.  And I thank OP for linking to the article and mentioning those stocks in his post, because I had no idea those two companies even existed and put them on my watchlist.  Investing in either one of them would be a great way to get some "mining exposure" without actually having to invest, run, and maintain all the equipment necessary to mine bitcoin yourself.

Looks like Marathon Digital Holdings is out of Las Vegas, NV but mines in North Dakota--smart, because I can only imagine how much cooling they'd need if the mining was being done in Las Vegas.  North Dakota, on the other hand, is known for its frigid temperatures. 

I have to say, I'm also kind of surprised that a pension fund would buy stocks like these, but if they're administering 401k's (and I don't know that they are), some participants may want high risk/high return investments.  In any case, this is pretty cool!

A pension fund doesn't invest in or administer 401Ks.  Pension funds are a different type of retirement account where the employer is responsible for funding and investing the assets for the purpose of paying out of the pool when employees retire.  401Ks are individual retirement plans that only apply to a single person.

I have never trusted RIOT since it basically abandoned it's previous business venture to become a bitcoin company.  The company used to be known as Bioptix.  It's a huge red flag when a company does a complete 180 and starts a completely new business that had nothing to do with it's previous business.  I guess it has fairly stable operations now, but I've never gotten over the initial distrust.

That's funny though how state is investing the money of pension fund which they will need to return with composite amount and total corpus amount to the pension holders. This is really really bad idea if you look at it in accordance with the future prospects. What would happen if suddenly Bitcoin collapses? Are not they are afraid of loosing all those funds in a blink of an eye. I know that BTC holds promising path ahead but that's just belief not assurance.

Whenever Government is using the public money for the stuff like above rather than public sector developments then they are gambling it!  :P

Or, there is another possibility of this one. They might be in the plans of supporting bitcoin because they themselves in the adoption phase in future. May be they know as one of the country from USA, they have bigger plans for crypto world and don't wanna miss the chance to invest today.

While the people who get into the job of fund manager for such a larger investment institution are generally quite clever, they will often times fall victim to popularity trends just like anyone else and this way they can always cover their back in future by saying they allocated some money to cryptocurrency. It is definitely worth noting that they are investing in profitable companies that have good reason to continue making margins in future - they're probably indirectly invested in Coinbase too after their recent stock market listing. On the whole though, $7 million out of $30 billion invested assets is a tiny amount of their overall assets but a good start I guess.

I wouldn't say it is a risky investment. $7M out of $30bn is only around 0.023% if my arithmetic is still intact. lol
That's quite low in my opinion, but at least it is a start and could produce a snowball effect between pension funds. That's good news anyway. Shout out to New Jersey!  ;D 8)

A responsible fund administrator will only invest a small percentage of the whole Pension Fund into High Risk investments, but nowhere are there mention made of what percentage are invested of the whole fund. If it is say... 2% of the fund, then I will not say it is reckless to do this... but if this is higher than that... then I will be worried as a member of that Pension Fund.

Crypto currencies are a High risk investment and it can give high yields over the long-term or it can completely collapse if it is one of the Pump and Dump Alt coins.  >:(

7 millions dollars is a fortune for us but for an entity managing the pension funds of people this is not really a lot of money, to me this seems like they are testing the waters and they are trying to become part of this market but they want to do it slowly, there is nothing wrong with that and they have time as I do not expect big movements in this market, however I am surprised as those funds tend to be very conservative on their investments they make so I did not thought possible they will be interested in investing in cryptocurrency related companies.

$7m isn't a huge amount but the fact that it comes from a State Pensions Fund is a big deal. It shows that there is trust at institutional and state level for investing in Bitcoin services, also it encourages other Pension Fund investors to do the same, and these guys have really deep pockets!

And it means, they also did their risk assessment here. If they invested in crypto-related business, this means they believe it has high potential to grow. Because if they have hesitation, they won't put this kind of funds to a very volatile market. This move will encourage other related institutions to make a move in this market, which is actually good for crypto community.

On that case, these guys is really thinking that $7m worth of mining asset would provide them higher profit. The present risk has been ignored, because of huge expectations everything has been locked up for one vision is to gain sustainable returns. Hopefully, bitcoin services will continue to grow and will become accessible in the whole world regardless of those countries who's still hating cryptocurrency.

I wouldn't call it a wise move since there have been a decline in prices of cryptocurrencies since the banning of mining farms in China recently. I could only guess that maybe their hardware are used, came from the closed facilities in China and they're grabbing the opportunity of a lifetime getting those machines at a very low price. Still even there are a widely banning issues around the some part of the world the New Jersey folks have guts to invest in. Well some others says it's wise to buy the dip and that includes in the prices of GPU also and other mining hardware. I salute them for being positive thinkers as I couldn't manage to do that.

If we look at it long-term, we will be able to see that it won't matter because mining bitcoins can just migrate to another country, it's not like China is the only place you can do mining. Plus it's a pension fund, it's not like they're going to take it out in 1 year let alone 10 years, I think that it will be profitable in the long-term no matter what happens.

....


I hope california stays out of bitcoin. I would expect them to pick up, where china left off if they became involved with cryptocurrencies. The US state of california should be blacklisted for crypto mining and crypto ventures. As there is a good probability of them banning exchanges and miners eventually the way china did.

Given california's known issues with rolling electrical blackouts. Rationed electricity. Unreliable spotty internet connectivity. Massive brush fires blazing out of control. Extremely high taxes, rent and cost of living. Unfriendly regulation towards local business owners and emphasis on imposing hard COVID lockdowns on business. With roughly 2/3 residents wanting to migrate out of california to other states. I doubt they will be able to attract much attention from miners given their negative business environment and bad reputation.

Thankfully, many other states might be good for cryptocurrency adoption. And are likely to provide good terms and conditions where crypto sectors might have opportunities to grow.

That depends on the perspective for you it's not a lot but for me, that's actually pretty huge amount given that they are using pension funds plus that money only grows bigger overtime, it's a pension after all so I expect to grow more in several years to come by. I don't necessarily think it's trust in the market that makes this institutional investors go for this kind of thing, it's more of a profit in my opinion.

Looks like they saw a vision of BTC in the future, but the sizable investment seems like they are taking a risk and continuing to use the mining that pollutes the environment for us, there needs to be some how to replace BTC mined in this kind of pollution model.

The only risk I can associate with such investment is that it is pension money because putting public fund at stake is not ethical but apart from that, it is an apt investment. Bitcoin is worth investing at the moment because institutional investors are beginning to show interest and the latest is Amazon. The more big money enter the circular, the greater the chances of soaring higher.

$7m is not a penny mate, that amount is worth billions when you convert it to my local currency. They made choice because they would have made cost evaluation and revenue that can be generated yearly and tax deduction.
Bitcoin mining is profitable and provides high rate of investment that's why many countries with less power source cost involved on them.

most certainly, they did their math here. putting the pension funds to this type of market, you really should do your calculations here before plunging in. if they can show profits at the end of maybe at least a year in venturing this project, more then likely other govt pension funds institutions will follow their steps.
for those who have money in this institution, and you agreed to put your money to crypto investments, you should know also the risks involved. so maybe, look for other tangible investments, just to prepare for what's to come.

That’s quite some risk that they are taking there, although I think the risk they have taken here is a less risk since they didn’t go straight to invest in Bitcoin, rather they invested in a bitcoin mining company, so there is more chances that they will make profit from their investment that they have made. Bitcoin mining is not really like when you’re investing directly into bitcoin, it’s completely when there is a huge money involved in it, there are more chances of making profit from mining of bitcoin.

So, I wouldn’t really say that they are taking much of risk. And I believe that a company that is as huge as that wouldn’t take a non-calculated risk, they will always make sure that they are moving rightfully.

I honestly do not think that investing into mining operations is better than investing into bitcoin itself. If I were given 7 million dollars and a chance to invest into something, instead of investing into mining companies, I would invest 4 million into bitcoin, 2 million into ethereum and 1 million into bnb and I am pretty sure that in the long run I will profit a lot more.

First of all no matter who much money you make from mining, eventually you will have to replace those items and buy something new, sure all these 3900 or whatever rigs could make you a lot of money if you could get your hands on it for cheap amount (retail price) but they are usually higher price in second hand (which is rare when second hands are considered) and bitcoin mining equipment are the same, because eventually better and better machines will come up and why would I want to spend that much to keep replacing old and broken ones with brand new ones using all the profits I made when I could simply buy coins itself and make a good profit.

It's not as risky as many think because pension is a long-term investment so using the fund for bitcoin mining is pretty much a useful thing to do because you basically help in moving the money and at the same time growing the money in the process since bitcoin is an appreciating asset, what they just have to worry is the expenses for the electricity that they're going to use.

I wonder what percentage of their fund was invested in cryptocurrency. Was it over 5% of their holdings? I hope it was specified.

Nonetheless, millions of dollars being invested in cryptocurrency by a state institution is a risky move. Hopefully, they have analyzed and made an in-depth study before they did the investment, otherwise, it will really be a gamble most especially for the members of the state pension fund because their money is at stake there. If something goes wrong, their money will be gone in a snap. I am well aware that high risks, high rewards, but for a state fund I think it is not a wise move to use the assets of their members in risking with a highly speculative asset and a very risky investment. Crypto is volatile, one massive dump can have a great impact on them.

I remember few years back, I heard the news about pension funds investing in cryptocurrencies like Bitcoins. I do think this might go both ways, if the company looses everything and at the same time, they need to employee special people who are well versed with cryptocurrencies like bitcoins, plus they have to be extra careful right now since the market is super volatile.
At some places it's preferable to invest in Bitcoins due to lower tax rates and at the same time the good returns. In New Jersey, cryptocurrencies are however taxable and are considered asset, therefore it's definitely for the gains.

But I do not understand how profitable will the trading be?? I think holding for a long period of time would work out if the government does not create unnecessary restrictions and at the same time the Volatility is controlled. I think right now was a good option to invest undoubtedly.

Exactly my biggest question. If pension funds that are supposed to be the safest are investing into stocks like these it's must be crazy, that participants are still holding it. But Actually, the total investment made by them in these shares is less than even 0.25% of their total AUM which means, even if these companies go bankrupt it still won't be a big loss to the fund in total. A 0.25% stake can be easily hedged too, so it's really not a big risk.
Secondly, I went through the Investor presentation of both the companies, apparently, both of them are expecting their future growths from primarily just one hope, that renewable energy sources will increase in the future, making power cheaper and mining more environment friendly.

What I feel is that this fund wanted to buy bitcoin but couldn't do it so ended up buying these stocks because they pretty much replicate the bitcoin price movement.

I really think that investing into companies is what pensions do anyway, this is more about accounting than specifically about crypto. If you find a company dealing with animal shit (literally manure company) but the finances looked awesome, wouldn't you invest? Does that mean you like what they are selling? Of course not, you just like the companies' finances and it looked like a profitable business deal for you.

This means that new jersey pension didn't really much care about crypto, or at least didn't have to, they look at the books of two companies they seem to like and realized it is a good investment for the future that could keep on growing bigger and bigger. That is why I honestly believe that we should not be looking into profits at specific companies like it matters in which sector they are, when investing only care about how much profit you can make.

Thats a big step forward investing into two companies, that too with a big sum of money. This move is really profiting, and the positive note out of this decision will surely make more other pension funds to be invested on cryptocurrency related ventures.

This will benefit the pension fund to grow and the same will benefit the pensioners as well. I find more good about it, than keeping the large funds idle. The risk is high, but the same is generating good money as they're trying to play a secure move in the market.