• Michigan’s Pension Fund’s $10M in ETH and $7M in BTC highlight the rising focus on crypto assets with strong monetary value.
  • Ethereum’s rollup model strengthens its value by stabilizing its base layer and enabling flexible, efficient Layer 2 growth.
  • Growing institutional interest in ETH and BTC shows demand for stable, value-rich crypto amid economic uncertainty.

Michigan’s Pension Fund invested $10 million in Ethereum (ETH) and $7 million in Bitcoin (BTC). Notably, the fund allocated more to ETH, underscoring a shifting focus toward assets with strong monetary premium attributes. 

Monetary premium, or the value derived from an asset’s money-like qualities, is a critical factor here. Both BTC and ETH are uniquely designed to support this premium by scaling execution on Layer 2 networks (L2s), which enhances their long-term valuation prospects.

Michigan's Pension Fund bought $10M worth of $ETH and $7M of $BTC . They bought only these two cryptos, and more of $ETH than $BTC . We will be seeing more of this type of allocation, and it has a lot to do with monetary premium.

Monetary premium is the term used to price…

— AdrianoFeria.eth 🦇🔊 🛡️ (@AdrianoFeria) November 5, 2024

ETH’s Competitive Edge Through L2 Adoption

Ethereum’s rollup-centric model has led to a robust L2 ecosystem that supports ETH’s value. This model enables Ethereum’s base layer (L1) to remain stable and resistant to changes, which enhances its monetary layer. 

Ethereum’s L2s allow multiple frameworks to compete and evolve, fostering flexibility without compromising ETH’s settlement layer. Although ETH shares execution revenue with L2s, the strengthened monetary premium far outweighs the cost, positioning Ethereum advantageously.

Additionally, ETH’s deflationary nature, thanks to the merge upgrade, and native yield generation are major draws for investors. Unlike Bitcoin, Ethereum doesn’t rely on issuance subsidies. 

The network also consumes less energy, addressing environmental concerns. These aspects, alongside Ethereum’s established L2 ecosystem, are compelling reasons behind Michigan’s preference for ETH over BTC.

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Broader Institutional Trends Favoring Bitcoin and Ethereum

Beyond Michigan’s move, several firms are actively increasing their cryptocurrency holdings . For instance, Semler Scientific, a healthcare tech company, recently acquired 47 BTC for $3 million, boosting its total holdings to 1,058 BTC. 

This investment aligns with Semler’s strategy to hedge against inflation and macroeconomic instability. Similarly, Japanese firm Metaplanet has been accumulating Bitcoin, raising 10 billion yen through a recent stock offering to bolster its BTC reserves.

Institutional interest in Bitcoin and Ethereum highlights a preference for assets with monetary premium potential. Unlike highly competitive execution-focused chains like Solana, ETH and BTC stand out for their intrinsic monetary properties. This shift suggests a growing recognition of crypto assets as stable, valuable reserves in uncertain economic climates.

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