Jersey City is aiming to cash in on the “risky” and “speculative” cryptocurrency market by investing a piece of the city’s pension fund.

While referred to as a currency, crypto is a digital asset that many see as the future of investment and spending across the world, even if few business currently accept it as payment.

The term “crypto” is derived from the encryption technology that makes the digital asset secure.

Bitcoin was the first cryptocurrency to be developed and has become the most notable and lucrative of the crypto market. The price of publicly traded Bitcoin hovered around $67,400 Friday, more than double its price last year and over 600% more than five years ago.

Mayor Steve Fulop in a social media post the city is updating paperwork to the Securities and Exchange Commission to allocate a percentage of the city’s pension fund into a Bitcoin Exchange-traded Fund (ETF).

An ETF allows investors to put their money in a managed fund that invests in numerous securities like stocks and bonds. It saves the investor time from looking into singular stocks or bonds.

“The question on whether crypto/Bitcoin is here to stay is largely over and crypto/Bitcoin won,” the three-time mayor and gubernatorial candidate said on X. “I’ve been a long-time believer (through ups/downs) in crypto but broadly, beyond crypto, I do believe blockchain is amongst the most important new technology innovations since the internet.”

Fulop worked for the Wall Street investment banking firm Goldman Sachs before enlisting in the Marine Corps after the Sept. 11 terrorist attack on the World Trade Center. Fulop was first elected mayor in 2013.

The move follows the state of Wisconsin, which invested 2% of its state pension fund in a Bitcoin ETF.

City spokeswoman Kimberly Wallace-Scalcione could not be reached for comment. It is unclear how much the city will invest in Bitcoin ETFs or why the city is jumping in now, 17 months before the mayor, leaves office.

The Jersey City pension fund is the retirement fund for city employees, with the exception of city firefighters and police officers, who are members of the state pension fund.

Two professors told The Jersey Journal investing in the crypto market is risky, since its worth is based on what another person is willing to pay. Crypto is not like purchasing stock in Verizon, a telecommunication company with a revenue stream and a customer base that determines its worth.

Calling crypto “completely speculative,” Dennis Rafferty, a finance and economics professor at St. Peter’s University in Jersey City, says “All financial assets and investments come with a degree of uncertainty. … The only thing that makes cryptocurrency worth anything is because you believe you can sell it to the next person for a value higher than you bought it.

“There is a reason why pensions are always invested in the safest of assets because you know companies like say Verizon and Goldman Sachs are going to be around 30 years … Can anybody tell anyone with certainty that cryptocurrency will be around in five years?”

John Donnellan, a global business professor and chairman of the Management Department inside New Jersey City University’s School of Business, says the mayor has diminished risk to the city by investing in an ETF, which is regulated.

Donnellan says buying into an ETF is a “smart” way to diversify investments and provide a “nice bump” for the pension without a potential large loss. He said people are attracted to Bitcoin because “it is a non-sovereign nation currency” regulated “by the people.”

“The way I look at crypto ETF, just remove the word crypto, if I put energy or water ETF, who cares?” said Donnellan. “Nobody would mention anything. The minute you put in the word crypto there is a fear of the unknown because it is still not fully understood.”