#Bitcoin allocation for retirement funds#
Hot Topic Overview
Overview
In recent years, the trend of pension funds allocating to Bitcoin has been emerging. Pension funds in Wisconsin and Michigan, USA, have become major holders of US stock market funds focused on cryptocurrencies, and some pension funds in the UK and Australia have also begun to make small allocations to Bitcoin through funds or derivatives. While most advisors are still reluctant to advise clients to invest in cryptocurrencies, some pension fund managers, such as Cartwright in the UK and AMP in Australia, have started experimenting with using Bitcoin to enhance returns. This is mainly because the size and potential of Bitcoin cannot be ignored, despite its high risk and novelty. As Bitcoin continues to rise, it is expected that more pension funds will join the ranks of those allocating to Bitcoin in the future.
Ace Hot Topic Analysis
Analysis
In recent years, the price of Bitcoin has surged, attracting a growing number of institutional investors, including pension funds. Pension funds in Wisconsin and Michigan, US, have become among the largest holders of US stock market funds focused on cryptocurrencies, while some pension fund managers in the UK and Australia have also made small allocations to Bitcoin via funds or derivatives in recent months. Mercer, a UK pension fund consultancy, has received a surge in inquiries since the US election, with trustees seeking to understand the popular asset class. Most pension funds have turned to the regulated US spot Bitcoin or Ethereum ETFs approved last year. Cartwright, a UK pension fund consultancy, has facilitated the first Bitcoin transaction, with an undisclosed small pension scheme directly investing about £1.5 million in Bitcoin. AMP Capital, an Australian pension fund manager, is also using Bitcoin to enhance returns, with its portfolio having a modest allocation to Bitcoin futures. Although cryptocurrencies are high-risk and novel, their scale and potential cannot be ignored. However, funds allocating to Bitcoin and other cryptocurrencies remain a minority in the pension industry, with most advisors reluctant to advise clients to venture into cryptocurrencies.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
Pension funds are starting to allocate to Bitcoin, but the allocation ratio is small, mainly through funds or derivatives.
Some pension funds hope to make up for the funding gap through Bitcoin's excess returns and are trying to set up Bitcoin funds.
Despite the high and novel risks of cryptocurrencies, their size and potential cannot be ignored, and some pension funds have begun to allocate Bitcoin futures.
Most pension fund advisors are still reluctant to recommend that clients invest in cryptocurrencies, and Bitcoin-allocated funds remain a minority in the pension fund industry.