For the first time, a US public pension fund has announced an investment in Bitcoin and Ethereum.
Texas firefighters’ pension fund chooses Bitcoin
This is the Houston Firefighters’ Relief and Retirement Fund (HFRRF) in Houston, Texas, whose mission is to provide a secure retirement plan for its members through professional administration, prudent asset management and sound investment practices.
This is why the recent investment in BTC and ETH is of particular importance, as these types of pension funds rarely venture into risky investments.
According to Bloomberg, the fund has invested $25 million through NYDIG. As the fund holds assets worth about $5.5 billion, the investment in digital assets is less than 0.5% of assets.
NYDIG is a company that provides products based on Bitcoin technology, and financial services to banks, insurance companies, corporations and institutions.
However, the dates on which these purchases were made are not known, so it is not possible to trace the likely average purchase price.
A fund for 6,600 firefighters
According to the fund’s Chief Investment Officer, Ajit Singh, this investment would be a tool for managing risk, as it would have a positive expected return and have a low correlation with any other asset class. He also said that he prefers to buy tokens directly, rather than taking on the risk associated with derivative products such as futures.
The fund manages the pensions of more than 6,600 Houston firefighters, and active firefighters pay 9% of their salary into the fund. The city of Houston contributes at least twice that amount.
Singh also revealed that they had been studying digital assets as an asset class for some time, stating that they had now become so important that they could no longer be ignored.
“We are excited to take this first step forward into the world of digital assets. This investment expresses our belief in the disruptive potential of distributed ledger technology for the development and democratization of value accumulation through disintermediation. We have been studying digital assets’ transformative potential for some time, and we are pleased to have a partner of NYDIG’s caliber to ensure secure, robust and efficient execution, and enhanced compliance as we enter this new market”.