#Bitcoin Allocation in Pension Funds#
Hot Topic Overview
Overview
In recent years, there has been a growing trend of pension funds allocating to Bitcoin. Pension funds in Wisconsin and Michigan in the United States have become among the major holders of U.S. stock market funds focused on cryptocurrencies, while some pension fund managers in the UK and Australia have also made small allocations to Bitcoin through funds or derivatives. Both Mercer and Cartwright, UK pension fund consulting firms, have received a large number of inquiries and facilitated some pension funds' direct investments in Bitcoin. AMP Capital, an Australian pension fund management company, has also used Bitcoin futures to enhance returns. While most advisors are reluctant to recommend clients engage in cryptocurrencies, as Bitcoin's size and potential continue to grow, more and more pension funds are starting to experiment with Bitcoin allocations in the hopes of achieving excess returns.
Ace Hot Topic Analysis
Analysis
In recent years, the price of Bitcoin has surged significantly, 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 through funds or derivatives in recent months. Mercer, a UK pension fund consultancy, has received a large number of inquiries since the US election, with trustees unwilling to be ignorant of the hot asset class. Most pension funds have switched to regulated US spot Bitcoin or Ethereum ETFs that were approved last year. Cartwright, a UK pension fund consultancy, has facilitated the first Bitcoin transaction, with an undisclosed small pension scheme directly investing around £1.5 million in Bitcoin. AMP Capital, an Australian pension fund management company, has also leveraged Bitcoin to boost returns, with its portfolio moderately allocated to Bitcoin futures. Although funds allocating to Bitcoin and other cryptocurrencies remain a minority in the pension industry, with most advisors hesitant to advise clients to venture into cryptocurrencies, the continued rise in Bitcoin prices and increased institutional investor participation may lead to more pension funds allocating to Bitcoin in the future.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
Retirement funds are starting to experiment with small allocations to Bitcoin, seeking outperformance.
Some US state pension funds have become major holders of cryptocurrency ETFs.
Pension fund consultants in the UK and Australia are pushing for Bitcoin investment and exploring the possibility of establishing Bitcoin funds with multi-employer pension funds.
Although the risks are high, the size and potential of cryptocurrencies cannot be ignored, and some pension funds have begun allocating to Bitcoin futures.