New Hampshire State Representative Keith Ammon discussed the potential benefits of the state diversifying its financial reserves into Bitcoin exchange-traded funds (ETFs) in a May 12 social media post.
The SEC approved trading of spot Bitcoin ETFs on US exchanges in January. Since then, the products have attracted enormous interest, with major financial institutions like JPMorgan Chase, trading company Susquehanna International Group and others revealing substantial holdings in these ETFs.
6,200% return on investment
Ammon Underlines a hypothetical scenario in which if the state had invested 5% of its rainy day fund in Bitcoin in 2016, the initial investment of $4.65 million could have grown to approximately $473 million, a remarkable profit of 10,000%.
However, the state missed this important ROI opportunity as it failed to invest in the leading digital asset.
However, Ammon noted that the state could correct this mistake and achieve a remarkable 6,200% return on investment by now allocating just 5% of its $290 million rainy day fund to a Bitcoin ETF and retaining until 2030.
Its projection stems from the ideas of influential figures in the crypto space, such as the CEO of Ark Invest. Cathie Boiswhich anticipates a significant resurgence in the value of Bitcoin. Wood proposes that if institutions devote 5% of their portfolios to Bitcoin, its price could skyrocket to $3.8 million by 2030.
Additionally, Ammon refers to Manuel Nordeste, Faithfulness Vice President of Digital Assets, who recently highlighted the growing trend of large pension funds and banks integrating Bitcoin ETFs into their portfolios.
Ammon also points out that a significant portion of retirement managers (25% to be precise) revealed ownership of digital assets during a recent panel. He noted:
“If just 1% of state pension assets under management ($5.5 billion) were invested in BTC, it would eclipse mining revenues, leading to a shortage of supply relative to demand and an increase in price of Bitcoin.”
Given this information, Ammon says exposure to Bitcoin could ease New Hampshire's financial burden. He said:
“The State of New Hampshire has an outstanding liability to the state retirement system of $1.25 billion and obligations of approximately $200 million. How could we get out of this hole? The answer may be right before our eyes, and it deserves further investigation.