- Wisconsin sold all its Bitcoin ETF shares before US tariffs caused market turmoil and crypto price drops.
- SWIB exited Bitcoin investments while other global funds increased their holdings in the same ETF.
- Despite Wisconsin’s exit the IBIT fund continues to lead with high inflows and growing market dominance.
The State of Wisconsin Investment Board (SWIB) fully exited its position in BlackRock’s iShares Bitcoin Trust (IBIT) during the first quarter of 2025, according to a May 15 U.S. Securities and Exchange Commission (SEC) filing.
$300 Million Stake Liquidated Before Tariff Surge
The liquidation involved all 6,060,351 IBIT shares, previously valued at over $321 million. The board’s exit occurred by March 31, just days before sweeping U.S. tariffs disrupted global markets. These tariffs, launched April 2, hit most major trade partners and rattled investor confidence.
U.S. trade policy changes, introduced in February, sharply altered the economic landscape. The administration imposed 25% tariffs on imports from Canada and Mexico. A 10% tariff on Chinese goods also took effect by February 4. Though Canadian and Mexican tariffs paused temporarily, pressure returned with higher metal tariffs on February 11. The steel tariff returned at 25%, while aluminum saw its rate doubled to 25%.
Escalating Tariff Tensions Impact Risk Assets
Tariffs on Chinese goods increased to 20% by March 4. In response, China raised counter-tariffs. This led to broad financial uncertainty. Analysts from Goldman Sachs warned that inflation could reach 3.8% during 2025. The crypto market reacted swiftly. Bitcoin dropped 2.3% to $83,200. Ethereum saw a larger drop of 4.5%.
As tariff retaliation escalated, U.S. rates on Chinese imports reached 145%. China retaliated with a 125% tariff on American goods. These developments dragged Bitcoin prices down below $75,000 in early April. The timing of SWIB’s sale suggests a move to reduce exposure to volatile risk assets during heightened market stress.
Tariff Relief Brings Temporary Calm
By mid-May, tensions cooled. The U.S. lowered tariffs on Chinese imports to 30%. China responded by cutting its tariffs on U.S. goods to 10%. The White House also paused most reciprocal tariffs on other countries, signaling a tentative return to trade stability.
SWIB originally bought into IBIT during Q1 2024. It was one of the first state funds to back Bitcoin ETFs, purchasing $164 million worth. It increased its stake in Q4 2024, shifting funds from Grayscale Bitcoin Trust (GBTC) to IBIT.
Other Funds Move in as SWIB Exits
While SWIB sold its entire Bitcoin ETF position, Abu Dhabi’s Mubadala fund increased its IBIT holdings. Mubadala added 491,439 shares in Q1 2025. Its total IBIT shares reached 8.7 million, worth over $512 million.
Despite SWIB’s exit, IBIT attracted strong inflows. On May 14, its total net inflows crossed $45 billion. It holds the top spot among spot Bitcoin ETFs, with assets exceeding $60 billion. The ETF’s last recorded outflow occurred more than five weeks ago.
SWIB retained nearly $19 million in Coinbase stock as of March 31. This suggests the board remains exposed to crypto-related markets, despite the full divestment from IBIT.
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