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The approval of Bitcoin ETFs by the US Securities and Exchange Commission (SEC) in January 2023 has opened the floodgates for significant institutional investment in the newly approved market. However, US states are also rushing to capitalize on the success of these ETFs by allocating a portion of their pension funds to reap profits and diversify their investments. Wisconsin, Jersey City, Michigan Allocate Millions To Bitcoin ETFs The first state to take the plunge was Wisconsin, which in May 2023 allocated approximately $98.6 million, or 2% of its pension fund, to BlackRock’s iShares Bitcoin Trust ETF. Now, two more states have joined Wisconsin in allocating state pension funds to Bitcoin ETFs. On Thursday, NewsBTC reported that the mayor of Jersey City, Steven Fulop, announced that it is updating its paperwork with the SEC to allow its pension fund to invest in Bitcoin ETFs.  Related Reading: VacEck Places $52.4 Million Price Tag On Bitcoin, But How Is This Possible? The latest state to join the Bitcoin ETF investment bandwagon is Michigan; as in an SEC filing on Friday morning, the State of Michigan Retirement System reported owning $6.6 million worth of shares in the ARK Bitcoin ETF managed by Ark Invest, amounting to 110,000 shares as of June 30th. However, Jersey City remains the only one that discloses the percentage of the fund’s investment in the Bitcoin ETF market and which asset manager will be selected to manage the fund’s allocation.  Still, this notes the significant traction that the new Bitcoin ETF market has gained over the past seven months among institutions and now these states, adding to the notable inflows and assets under management surpassing the $17 billion milestone, eclipsing tech-based ETFs.  BTC Price Rebound Fueled By Spot ETFs The Bitcoin price has steadily recovered over the past two weeks, rebounding from a 6-month low of $53,500 at the beginning of July. However, according to a new report by on-chain and market data analytics firm CryptoQuant, this price recovery has continued to rely on spot Bitcoin ETFs rather than a surge of new investor inflows. The CryptoQuant report examined Bitcoin price movements and new investor holdings over the past 8 years and found that in previous long-term bull cycles, the Bitcoin price peaked when the number of new entrants crossed a certain threshold, indicating a strong “fear of missing out” (FOMO) driving inflows. However, the firm contends that the current Bitcoin bull cycle does not exhibit the same trend of new investor inflows at price tops. Instead, the report noted that the recent spike in new inflows seen in the year’s first quarter appears to be just a temporary wave between longer-term cycle tops. Related Reading: Bitcoin Supply Drop Signals Upbeat Price Movement, Analyst Says This suggests that Bitcoin’s recent price recovery has been driven more by the inflows into spot Bitcoin ETFs rather than a surge of new investors entering the crypto market.  While spot ETFs have supported the Bitcoin price, the report indicates that a more sustainable upside will depend on a return of new investor demand. When writing, the largest cryptocurrency on the market was trading at $67,530, up nearly 5% in the 24-hour time frame.  Featured image from DALL-E, chart from TradingView.com