Jersey City Mayor Steven Fulop is the latest politician to make cryptocurrency history yesterday. City government to invest in BitcoinAccording to social media posts, the mayor, who is currently running for governor, said the city’s pension plan will invest an undisclosed amount in a Bitcoin exchange-traded fund (ETF).
In an interview with The Block, Mayor Fulop, a former trader at Citibank and Sanford Bernstein, said the investment is being made as a hedge against inflation.
“It’s been very, very difficult over the last couple of years, and it seems to be getting worse, not better,” Mayor Pullop told The Block, discussing the state and country’s rising cost of living. He added that it’s “a critical and relevant asset class” that governments and businesses hold as a store of value, which is “normal.”
Pullop is not the only one banking on the cryptocurrency industry as a political maneuver or saying that Bitcoin can offset the effects of inflation. For example, the Wisconsin Investment Commission disclosed earlier this year that it had invested about $160 million of its $156 billion in assets in Bitcoin ETFs from Grayscale and BlackRock, partly because the assets “Inflation hedge.”
Senator Cynthia Lummis is also reportedly working on a bill that would require the U.S. central bank to invest in Bitcoin as a Treasury asset as the U.S. dollar continues to lose value. And presidential candidate Robert F. Kennedy has said that if elected, he would require the U.S. Treasury to buy as much Bitcoin as it holds in gold — roughly $615 billion, or about half of BTC’s current market cap.
While a handful of politicians from both parties have supported the cryptocurrency industry over the past few years, former President Trump has been credited with turning the topic into an election issue. After shifting from his previous skepticism, Trump has embraced the industry as a whole and worked to win over “single-issue” crypto voters.
Fulop, a Democrat running to replace incumbent Gov. Phil Murphy, who is ineligible for reelection, said that if elected, he would consider campaigning to get New Jersey to own bitcoin and attract cryptocurrency companies to headquarter in the state. Several large cryptocurrency companies are currently based in Jersey City, just four minutes from Wall Street by subway.
“Clearly we are demonstrating through our actions that we support the industry,” he said, adding that there will be “perhaps a broader conversation” with a range of private and public stakeholders to make that happen.
“I would definitely replicate this and appoint a board member who conceptually supports bitcoin to explore it,” said John Metro, a business manager for the city of Jersey City who proposed the idea of having the city’s pension fund hold bitcoin.
Pullop wouldn’t disclose how much the public pension fund would invest in bitcoin, but said it was looking to Wisconsin as a model, which has invested about a tenth of a percent of its pension assets in bitcoin ETFs. The Jersey City municipal pension plan is initially investing in physical bitcoin ETFs from Fidelity and BlackRock.
The Fulop market said it personally holds ETH in addition to BTC, but said it is not yet considering owning the spot Ethereum ETF that launched earlier this week. Similar conversations should be had before the government fully owns Bitcoin.
“There are all kinds of public finance laws that govern what we can hold and how we can present the cash and what we can do. So it’s not something the city can do alone, and that’s definitely something that we’re going to have to talk to the city council about,” Mayor Fulop said.
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