Coinbase, the largest US crypto exchange, is planning to tap into Australia’s 0 billion self-managed pension sector, according to a Bloomberg report. The company is developing a service tailored for this sector, aiming to cater to the growing interest in crypto investments among self-managed funds. This move comes amidst a significant increase in crypto holdings […]
Bitcoin News
Michael Saylor Foresees U.S. Pension Funds’ Bitcoin Adoption
Michael Saylor, co-founder of Microstrategy and a prominent Bitcoin advocate, recently suggested in a social media post that U.S. pension funds, which collectively manage approximately trillion in assets, will need to incorporate bitcoin into their portfolios. He stated, “There are thousands of pension funds in the United States managing ~ trillion in assets. They […]
Bitcoin News
Japan’s $1.5 Trillion Pension Fund To Assess Bitcoin For Diversification
The Government Pension Investment Fund (GPIF) of Japan, the world’s largest pension fund with assets totaling .5 trillion, has officially announced its initiative to explore diversification opportunities that include Bitcoin, alongside traditional investments such as gold and more unconventional assets like forests and farmland. This exploration marks a monumental potential pivot in the investment strategy of a fund traditionally associated with more conservative asset classes.
Japan GPIF Seeks Information On Bitcoin
According to a Bloomberg report dated March 19, 2024, GPIF is in the initial phase of this exploration, focusing on an information request stage rather than signaling an imminent expansion of its investment portfolio. The fund currently diversifies its holdings across a vast array of assets, including domestic and international stocks and bonds, infrastructure, and real estate. With assets under management valued at approximately 225 trillion yen as of the end of December 2023, the GPIF’s interest in Bitcoin and other illiquid assets underscores a notable shift towards broadening its investment aperture.
The GPIF stated, “In addition to basic knowledge about the assets targeted for information provision, we are also seeking information on how overseas pension funds incorporate them into their portfolios and actual investment cases.” This reflects a methodical approach to understanding the potential benefits and risks associated with diversifying into less traditional and more volatile asset classes like Bitcoin.
Recent years have seen the GPIF actively seeking to enhance the sophistication and diversity of its portfolio. “Since the fall of 2022, a total of 56 active funds have been selected in North American, developed country, and Japanese stocks,” the GPIF noted, highlighting its ongoing efforts to refine its investment strategies. The inclusion of Bitcoin and other non-traditional assets would represent a further step in these diversification efforts.
However, the GPIF has cautiously noted, “This announcement is a request for information and does not indicate that the company will expand its investment targets in the future.” This statement clarifies that any decision to incorporate Bitcoin or other proposed assets into its investment strategy will depend on the outcomes of its current research phase.
This move by the GPIF comes amid broader regulatory changes in Japan regarding Bitcoin and crypto investments. Just one month prior to this announcement, Japan’s administration, led by Prime Minister Fumio Kishida, moved to enable investment funds to hold Bitcoin and other cryptocurrencies directly. “The bill states that ‘measures will be taken to add crypto assets to the list of assets that can be acquired and held by investment limited partnerships,’” according to a statement from the Ministry of Economy, Trade, and Industry.
The GPIF’s exploration of Bitcoin and alternative assets not only underscores the growing institutional interest in Bitcoin, but is also in line with Japan’s regulatory advances aimed at integrating digital assets into the country’s economic framework. The potential inclusion of Bitcoin in the world’s largest pension fund would be huge news and could have implications for other countries and their investment strategies.
At press time, BTC traded at ,589.
South Korea’s National Pension Service Dives Into Crypto With $20M Coinbase Investment
Regulatory filings with the U.S. Securities and Exchange Commission (SEC) reveal that the National Pension Service of South Korea acquired 282,673 Coinbase Global shares in 2023’s third quarter. This transaction, valued at approximately million, marks the pension fund’s inaugural foray into the cryptocurrency sector.
World’s Third Largest Pension Fund Purchases 282,673 Shares of Coinbase Global
The National Pension Service, founded in 1988, operates as South Korea’s public pension fund and ranks as the world’s third-largest. Overseen by the National Pension Service Investment Management (NPSIM), the scheme mandates enrollment for both Korean citizens and foreign residents in Korea. A recent SEC filing disclosed that in the third quarter, the NPS invested in Coinbase Global, securing 282,673 shares at a cost of million.
To date, the NPS’s investment in Coinbase (listed on Nasdaq as COIN) has appreciated by 40%, having bought shares at an average of .5 each. Currently, COIN’s shares are trading at .15 each, reflecting a significant 26% increase over the last month. It appears that the NPSIM opted for COIN shares as a comparatively lower-risk alternative to direct crypto holdings, aligning with a global trend where numerous entities invest in stocks of publicly traded firms within the burgeoning sector.
The NPS reportedly manages assets worth around 5 billion. Its performance in 2022 was varied, enduring a negative accumulated return of -79.6 trillion won (.17 billion), leading to an annualized return of -8.22%. Conversely, this year has been more favorable, with a positive return of 95.2 trillion won (.96 billion) thus far. Following the previous year’s downturn, the fund’s recent pivot to crypto sector investments might be an attempt to counterbalance the losses incurred last year.
What do you think about the NPS investing million in Coinbase shares? Share your thoughts and opinions about this subject in the comments section below.
Canadian Pension Fund Writes Off $150M Celsius Loss, Believes They Entered Crypto “Too Soon”
A major Canadian pension fund manager has written off a 0M investment in crypto lending platform Celsius Network as a total loss, expecting an impending shutter of the once high-flying CeFi platform.
According to a report from the Financial Times, the fund is the second-largest in Canada and has signaled the write-off as being indicative of the funds’ expeditious decision to have exposure to crypto assets.
Canadian Fund’s “Disappointment”
Caisse de dépôt et placement du Québec, or CDPQ, is Canada’s second-largest pension fund in the country, according to the Times, managing over 0B in funds in Quebec. The fund’s stake in Celsius was written off “out of prudence,” according to the report, signaling that the fund has no expectation of Celsius Network achieving any semblance of a recovery.
The move comes less than a year after the fund described it’s investment into Celsius as being indicative of it’s “conviction” in blockchain technology, and serves as another unfortunate domino in the Celsius downfall. Chief executive of the fund, Charles Emond, said that the fund “went in too soon into a sector that was in transition, with a business that had to manage extremely quick growth.”
While the fund outperformed benchmarks, it still recorded a loss of nearly 8% in the six months ending in June. Emond added that “the first six months of the year were very challenging… Whether it is Celsius or any other investment, needless to say that when we write it off, we are disappointed with the outcome and not happy.”
Celsius token (CEL) has seen a major slide that is commensurate with the general consensus of the platform’s future, despite a recent pump. | Source: CEL-USD on TradingView.com
State Of Celsius
Much like the loud and headline-grabbing downfall of Terra Luna, Celsius is certain to leave newer crypto investors with a bad taste in their mouth. When it comes to the CDPQ, the Times has reported that Celsius’ crumbling is enough to leave the Canadian pension behemoth on the sidelines when it comes to short-term crypto investors, while remaining optimistic on the long-term perspective around blockchain technology.
Meanwhile, it’s gone from good to bad to ugly (and worse) for Celsius as the threads unravel. In recent days, it has come to light that Celsius founder Alex Mashinsky took over the firm’s trading strategy earlier in the year. The news comes as Celsius works through it’s bankruptcy case with a New York judge, who recently granted the firm an approval to sell off mined Bitcoin to assist in paying for operations.
Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
NewsBTC
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Bitcoin Projected as Solution to Ongoing Private Pension Crisis
Private pension fund managers should consider dipping their toes into bitcoin, believes Mark W. Yusko.
The Morgan Creek Digital co-founder lately projected the cryptocurrency as a mean to balance the risks associated with private pension funds. The recommendation came after the pension industry posted its second-worst performance since 1950 in the fourth quarter of 2018, exposing millions of retirees to a financially unstable future.
“Pensions have precisely wrong Asset Allocation at the precisely wrong time (again) things will get truly ugly wrt to funding levels & ability to honor commitments when valuations mean revert.”
Serious #BadNews…
Pensions have precisely wrong Asset Allocation at precisely wrong time (again…)
things will get truly ugly wrt to funding levels & ability to honor commitments when valuations mean revert…Imperative that Pensions #GetOffZero Allocation to #Crypto now https://t.co/hwQXskqW3w
— Mark W. Yusko (@MarkYusko) April 8, 2019
The statement was further clarified by Yusko’s partner at Morgan Creek and a renowned bitcoin bull, Anthony “Pomp” Pompliano. In his recently published newsletter, Pomp wrote that a majority of private pension funds were highly concentrated on equities. He named Japan’s Government Pension Investment Fund, the world’s largest pension fund, for keeping about 50-percent of their assets in global equities. As a result, the fund had already lost about 6 billion in Q4 2018, leading to a 9.1-percent quarter-loss.
“One of the most conservative capital allocators in the world has a portfolio that is constructed in such a way that they experienced uncommon levels of volatility and almost lost a double-digit percentage of their assets in 90 days,” explained Pomp.
Allocating 1% Portfolio to Bitcoin
Pomp reiterated Yusko’s stance about allocating a portion of pension fund portfolios to bitcoin, adding that they would reduce the overall risks profile because of its low correlation with the mainstream markets.
“Adding the low correlation and asymmetric nature of Bitcoin and crypto to these pension portfolios should actually decrease the portfolio’s risk profile, rather than increase it based on modern portfolio theory,” Pomp stated. “A simple 1% allocation has the potential to materially negate any losses that could be experienced through an equity market fall.
The comments appeared despite the crypto market’s strong correlation with the US stock market last year. The Federal interest rate hikes in 2018 allegedly withdrew a huge amount of capital from both equities and crypto market. The Q4 was not just bad for stock markets but it was equally depressive for the cryptocurrencies.
Most institutional investors still kept their distance from the 10-year old, billion bitcoin market because of it low exposure to regulations. The cryptocurrency market’s collapse in 2018 didn’t help its case either. Institutions are now waiting for more clarifications from regulators. At the same time, they await a better infrastructure to speculate on cryptocurrencies before they make their first move into the nascent market.
That explains why the pension fund industry decided to stay away from the crypto market, barring a few examples. Two pension funds in Virginia, for instance, lately invested in a venture capital fund that focuses on early-stage blockchain startups and cryptocurrencies.
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