Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Ben chatted with Jersey City officials as the municipality’s pension fund is just about ready to buy bitcoin ETFs.

• Why the latest CPI data sets the stage for more of the same from the Fed in December.

• Robinhood’s latest move appears to be another example of crypto euphoria.

The Jersey City pension fund’s path to BTC exposure

In crypto, the phrase “the institutions are coming” is perhaps overused. But that doesn’t make it any less true. We’ve also repeatedly heard that, for many of these investors, turning such a desired allocation into a reality often takes time.

After speaking with Jersey City’s mayor and business administrator, both those statements checked out. An allocation — dreamed up months ago — is coming soon.

“Would we have liked to get involved at $60,000 as opposed to $90,000?” Mayor Steven Fulop said to me Tuesday. “The answer’s obviously yes. But I think if you look in a year or two years from now, it’ll still be much higher than it is today.”

As a reminder, Mayor Steven Fulop said in July that Jersey City’s pension fund was planning on getting exposure to bitcoin ETFs.

We revisit this after Donald Trump’s election win, which industry watchers say is likely to spur another wave of institutional crypto adoption.

Jersey City Business Administrator John Metro said he and Fulop started talking about this around the time Wisconsin’s investment board revealed a roughly $100 million allocation in bitcoin ETFs. That was May.

Metro then presented the idea to the pension fund’s board, composed of five elected members. The board had questions (such as how long the fund would hold it for), but did not show opposition, the Jersey City officials noted. 

Because of the limited track record for the ETFs (they launched in January) compared to other assets with year-over-year track records, the board had to update some of its investment rules. 

That was done about a month ago, Metro said. And standard protocol, he added, is for the pension fund to abstain from making any significant changes in the month of an election, due to volatility. 

“Now that the asset is identified as part of our investment strategy, we’ll actually go to the physical market in the next three weeks,” Metro explained.

The pension fund — which manages about $225 million in assets — is looking at the BTC products by BlackRock and Fidelity, given their high volumes. It could look to establish a 2% or so position in bitcoin ETFs as a start, the officials said — trimming allocations in other assets to make room.  

Fulop and Metro didn’t detail which assets it would reduce exposure to. But the mayor did note the similarity between gold and bitcoin when it comes to serving as a “store of value.”

“And if you think about the utility relative to gold, in many ways bitcoin is more advantageous in the sense that you can move bitcoin around instantaneously,” Fulop added.

As for whether Jersey City would next look to gain ETH exposure (like Michigan’s pension fund), Fulop said they’re not there yet. “I personally think Ethereum is here to stay, and I would feel comfortable,” he noted. “But it’s not all my money in the pension funds.” 

To read more excerpts from my interview with Fulop and Metro, check blockworks.co.

— Ben Strack

Bitcoin’s ranking on the asset market cap list, as of 2 pm ET Wednesday. The list includes public companies, precious metals, ETFs and, clearly, crypto.

BTC’s market cap recently eclipsed $1.8 trillion as its price has surged after the US election to highs above $90,000. The largest crypto asset sat above silver and oil company Saudi Aramco.

Gold’s market cap remains about 10 times higher than BTC, while bitcoin also still trails five stocks: NVIDIA, Apple, Microsoft, Amazon and Alphabet.

The Consumer Price Index increased 0.2% in October, bringing the annual inflation rate to 2.6% — in line with analyst estimates but still putting prices higher than where the Fed would like. 

So-called Core CPI, which excludes volatile food and energy prices, also came in as anticipated, rising 0.3% over the month and 3.3% annually. 

The CPI for the 12 months ended September was 2.4%. This latest reading should assure investors that the Fed, as the latest dot plot had indicated, will continue on its easing path through the end of the year. 

Odds of a second 25-basis point interest rate cut in December are now at 82%, up from 58% a day ago, according to CME Group data. 

Given today’s unsurprising numbers, the focus now shifts to 2025, when President-elect Donald Trump will move back into the White House and potentially complicate the central bank’s mission with his ambitious economic plans. 

The print comes a day before Fed Chair Jerome Powell is scheduled to speak at the Fed Bank of Dallas, so maybe we will get a sense of how he’s thinking about economic policy then. Markets will be listening, and so will we.

— Casey Wagner

Trading app Robinhood on Wednesday added four new cryptocurrencies to its platform: solana, cardano, XRP and memecoin pepe. The move comes after the SEC has, in separate instances, named both SOL and Cardano’s ADA token securities. 

The SEC classified SOL and ADA, along with 11 other crypto assets, as securities in its June 2023 lawsuit against Coinbase. That suit is ongoing. Both tokens were also called out in the Wells notice the securities regulator sent to Crypto.com last month. 

Robinhood’s move comes as the crypto industry continues to ride a wave of euphoria and higher prices in the wake of Donald Trump’s win last week. His promises to overhaul SEC leadership and make the US a hub for digital asset businesses have many feeling optimistic. 

But let’s consider a scenario. Even if Trump replaces Gary Gensler with another current commissioner, most legal experts agree that Trump can’t actually remove Gensler entirely. So he’d still be a commissioner even if, say, Mark Uyeda becomes acting chair in January. 

To drop a lawsuit (such as the one against Coinbase), SEC staff would have to propose it to the commissioners, who would then vote. Even if the vote passes, the SEC would still have to have the motion approved by the court.

A lot of ‘ifs’ here. I wouldn’t hold your breath.

— Casey Wagner

• Arca and BlockTower said Wednesday they intend to merge to create “a leader in crypto asset management.” The combined team is set to broaden its investment options, “enabling investors worldwide to access digital assets through institutional-caliber products," Arca CEO Rayne Steinberg said in a statement. 

• On the topic of crypto asset managers, Bitwise acquired Ethereum staking provider Attestant Limited. The crypto ETF issuer, which also offers hedge fund solutions, private funds and separately managed accounts, will now provide professional non-custodial staking. 

• BlackRock is set to offer its tokenized fund — the USD Institutional Digital Liquidity Fund (BUIDL) — across more blockchain ecosystems. The asset management giant on Wednesday revealed the launch of new share classes on Aptos, Arbitrum, Avalanche, Optimism's OP Mainnet and Polygon.

• Forward Guidance’s Felix Jauvin interviewed Stephen Miran, who worked at the Treasury under Donald Trump and is a fellow at the Manhattan Institute. Check out what he had to say about Trump’s potential economic policies.