Jersey City mayor and NJ gubernatorial candidate Fulop sees bitcoin as an ‘inflation hedge’

Jersey City Mayor Steven Fulop is the latest politician to make crypto history when he announced yesterday that the city government would invest in bitcoin . According to a social media post, the mayor, who is currently running for state governor, said the municipal pension plan would put an undisclosed sum of money in bitcoin exchange-traded funds. 

In an interview with The Block, Mayor Fulop — who was formerly a trader for Citi and Sanford Bernstein — noted that the investment is being made as a hedge against inflation. 

“It's been very, very difficult over the last couple of years, and it seems like it's getting worse, not better,” Mayor Fullop said in an interview with The Block, discussing the increasing cost of living in the state and country. He added that it’s an “important and relevant asset class” that will be “commonplace” for governments and corporations to hold as a store of value. 

Fulop is not alone in leaning into the crypto industry as a political maneuver or saying bitcoin could counter the effects of inflation. For instance, the State of Wisconsin Investment Board disclosed earlier this year it placed about $160 million of its $156 billion in assets in Grayscale and BlackRock’s bitcoin ETFs in part because the asset acts like an “inflation hedge.”

Sen. Cynthia Lummis is also reportedly working on a bill requiring the U.S. central bank to invest in bitcoin as a treasury asset as the U.S. dollar continues to lose value. And if elected, presidential candidate Robert F. Kennedy said he would gode the U.S. Treasury to buy as much bitcoin as its gold holdings — roughly $615 billion, or about half of the current market capitalization of BTC.

While a handful of politicians across the aisle have supported the crypto industry over the past few years, former President Trump is largely credited for making the subject an election issue. After reversing course from his previous skepticism, Trump has embraced the industry as a whole and worked to garner support from “single issue” crypto voters. 

Fulop, a Democrat running to replace current Governor Phil Murphy, who is ineligible for reelection, said that if elected, he would consider campaigning to have the state of New Jersey hold bitcoin and bring in crypto firms to headquarters in the state. Several large crypto firms are currently in Jersey City, just four minutes from Wall Street by subway. 

“Obviously, we're indicating with our actions that we're supportive of the industry,” he said, adding that it’s “probably a broader conversation” with multiple private and public stakeholders “to make that a reality.”

“I would certainly look to replicate this, and I would look to appoint board members that are supportive of Bitcoin conceptually so that they would be able to explore it,” said John Metro, the business administrator of Jersey City, who pitched the idea for the city’s pension to hold bitcoin. 

Fulop did not disclose the amount that the public pension fund would invest in bitcoin, though he said he was looking at Wisconsin as a model, which put about 1/10 of 1% of its pension assets into bitcoin ETFs. Jersey City’s municipal pension plan is initially investing in Fidelity and BlackRock’s spot bitcoin ETFs.

While Mayor Fulop said he personally holds ETH in addition to BTC, he said the city is not yet considering holding spot Ethereum ETFs, which went live earlier this week. Similar conversations would have to happen before the government can hold bitcoin outright. 

“There's all sorts of public finance laws around what we can hold and how we have to present cash and what we're allowed to do. So it's not something the city could unilaterally do, and that would be obviously a conversation with the city council,” Mayor Fulop said.