The State of Michigan Retirement System (SMRS) has significantly increased its Ethereum (ETH) holdings, raising its investment to $10 million and surpassing its Bitcoin (BTC) allocation.

This move makes Michigan the first U.S. state pension fund to invest in an Ethereum-based exchange-traded fund (ETF).

Michigan Pension Fund’s Crypto Portfolio

SMRS, which boasts more than $13 billion in assets, began exploring cryptocurrency earlier this year as part of a broader diversification strategy.

In July, it got into BTC with a $6.6 million purchase of ARK 21Shares’ spot Bitcoin ETF, more than six months after the Securities and Exchanges Commission (SEC) approved the investment product.

According to a recent SEC filing, SMRS now holds 460,000 shares in the Grayscale Ethereum Trust (ETHE), valued at about $10.07 million. It also owns another $1.12 million worth of Ethereum Mini Trust shares. Combined, these holdings total nearly $11 million exclusively in Ethereum-based ETFs.

This increased allocation means that SMRS now has more money invested in Ethereum than Bitcoin, given that its ARK 21Shares position is valued at approximately $7 million.

More U.S. States Embrace Crypto Investments

Michigan’s focus on Ethereum reflects a growing interest among U.S. states in the broader potential of digital assets. In Florida, Chief Financial Officer Jimmy Patronis recently advocated for Bitcoin’s inclusion in the state’s retirement system.

In a letter to the Florida State Board of Administration, Patronis cited the state’s strong economic performance and history of innovation as reasons to explore Bitcoin. He proposed a “Digital Currency Investment Pilot Program” to diversify the Florida Growth Fund into such asset classes.

Wisconsin has also allocated a