#Bitcoin Allocation for Retirement Funds#

In recent years, the price of Bitcoin has skyrocketed, attracting more and more institutional investors, including pension funds. Pension funds in Wisconsin and Michigan, USA, have become one of the largest holders of US stock market funds focusing on cryptocurrencies, while some pension fund managers in the UK and Australia have also made small allocations to Bitcoin through funds or derivatives in recent months. Mercer, a UK pension fund consultancy, has received a surge in inquiries since the US election day, as trustees do not want to be left in the dark about the hot asset class. Most pension funds have turned to regulated US spot Bitcoin or Ethereum ETFs approved last year. Cartwright, a UK pension fund consultancy, has facilitated the first Bitcoin transaction, with a small undisclosed pension scheme directly investing approximately £1.5 million in Bitcoin, hoping to fill the funding gap through excess returns. Australian AMP Pension Fund Management Company has also used Bitcoin to boost returns, with its portfolio modestly allocated to Bitcoin futures. However, funds allocating to Bitcoin and other cryptocurrencies are still in the minority in the pension industry, with most advisors reluctant to advise clients to venture into cryptocurrencies. Despite Bitcoin's high risk and novelty, its size and potential cannot be ignored, so some pension funds have started to try allocating to Bitcoin in the hope of achieving higher returns. However, as the Bitcoin market is highly volatile and risky, most pension funds remain cautious, and whether they will allocate to Bitcoin on a large scale in the future remains to be seen.