• Wed. Jul 17th, 2024

Japanese Pension Funds Woos BTC with 1.5 Trillion Amid Favorable Performance

Maria Bartiromo

ByMaria Bartiromo

Mar 30, 2024
new blockchain based exchange in Tokyo Japan Osaka Pedestrians - Free photo on Pixabay

Amid a soaring cryptocurrency market, Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund with assets over $1.5 trillion, is allegedly considering investing in Bitcoin. This move has been described as a substantial shift in investment strategy, and aligns with a global trend noticed by pension funds and follows a wave of increased institutional interest in digital assets.

A CFA Institute survey from April 2022 found that pension funds had been investing in cryptocurrencies at a significant rate. According to the report, 94% of state and federal pension plan sponsors had dabbled in the cryptocurrency market. Institutions like the GPIF can now investigate investment potential in digital assets because of the increasing recognition of cryptocurrencies as a valid asset class.

Millions of Japanese people’s retirement funds are managed by Japan’s GPIF, which is reportedly considering putting some of its enormous holdings into Bitcoin. As at press time, the precise nature of the proposed investment is still u but experts in the field believe that GPIF’s debut in the cryptocurrency space may significantly affect the general acceptability and uptake of digital assets.

GPIF Considers Liquidating Alternative Assets, To Expand it’s Investment Window 

The GPIF is considering investing in Bitcoin at a time when other significant pension funds are also taking a look at the cryptocurrency space globally. A report from Bitcoin Magazine says that GPIF would be considering liquidating BTC, Forests, Gold, and other alternative assets, which it claims are part of its diversification plans.

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GPIF has never been included among the listed alternative options, but the central fund has proven that it is looking for a second opinion for bonds and stocks. GPIF is currently in its early exploration stage, concentrating on gathering more information instead of expanding its investment portfolio.

The fund is currently working on diversifying its holdings in international and local stocks, as well as bonds, real estate investment, and physical infrastructure. With Assets Under Management (AUM) at about  225 trillion yen in December 2023, the fund wants to expand its investment window in BTC and other Liquid assets. 

Majority of Pensions Sponsors Shows Interest, GPIF Makes Announcement

Chayanika Deka from CryptoPotato said that the GPIF’s consideration of investing in Bitcoin during a bull market highlights the necessity of cautious thought and extensive research. The survey also revealed that 62% of corporate benefits plans moved funds into the same sector.

The pension plan had written off the $95 million investment in the defunct FTX exchange. In reaction to this drawback, the pension funds have clarified their intentions on their future involvement with cryptocurrency investments, stating they will stay away from it now.

GPIF, in it’s latest statement, announced that it is only working to gather enough information about the proposed investment for future purposes. It added that the said announcement clears any speculation about it’s direct involvement in BTC or it’s equivalents. The Japanese Prime Minister Fumio Kishida, few days after the GPIF announcement, made moves to facilitate investment funds to directly hold BTC. 

South Korea’s NPS Picks Interest in Cryptocurrency Investment 

The collapse of FTX has been linked to the cryptocurrency market’s negative trend, which also raised a noticeable shift in the market. One of the examples was the pension plan for Ontario Teachers, which has so far encountered severe criticism for its investment a few months after FTX went bankrupt sometime in November 2022.

In another development, the National Pension Service (NPS) of South Korea has been ranked the biggest pension fund in the world and has purchased Coinbase stock (COIN) worth $20 million in the third quarter of 2023. The move by South Korea’s NPS has generated a lot of criticism because of what critics called an “indirect involvement” in cryptocurrency activities.

Responding to the critics, the organization explained that its involvement in cryptocurrency businesses is strictly limited to cryptocurrency exchanges. Meanwhile, the organization has assured the public that they would not allocate funds directly to cryptocurrency contrary to popular belief.

Maria Bartiromo

Maria Bartiromo

Maria Bartiromo is a renowned news writer and journalist, celebrated for her insightful reporting and authoritative voice. With a career spanning years, she has established herself as a trusted source of accurate and comprehensive news analysis, keeping readers informed on vital global developments.

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