As a seasoned researcher with over two decades of experience in the financial industry, I’ve witnessed countless trends and shifts in the market. The recent move by AMP, an Australian superannuation fund, to invest $27 million into Bitcoin is undeniably significant, particularly given its sizeable assets under management (AUM).
In May 2024, AMP, a leading Australian retirement savings fund, publicly announced its investment of around $27 million into Bitcoin (BTC). This marked a significant step forward as it became the initial major Australian superannuation fund to venture into cryptocurrencies.
Based on information from the Financial Review, it’s stated that the fund manages approximately $57 billion worth of assets. The investment in Bitcoin is relatively modest, equating to just 0.05% of the total assets managed by the fund.
The superannuation fund is said to have purchased Bitcoin between $60,000 and $70,000 as a means to diversify investments and take advantage of Bitcoin’s increasing value. This increase in value followed the election of Donald Trump on November 5, which sparked a significant price surge in Bitcoin.
Although Bitcoin has reached $100,000 and experienced a rise in price, other Australian pension funds are not indicating they will follow AMP’s example by investing in it, as they continue to perceive the emerging asset as too risky for inclusion.
Pension funds diversify into Bitcoin
Across the globe, pension funds are drawn to Bitcoin due to its consistent price growth and protective features that help boost returns and safeguard buying power.
Back in July 2024, I found myself among those fortunate investors who had a significant stake in Bitcoin, all thanks to the ARK 21Shares’ Bitcoin exchange-traded fund (ETF) that Michigan’s pension fund had invested in. This investment exposed us to a substantial $6.6 million worth of Bitcoin.
In August, South Korea’s National Pension Service, the globe’s third-largest public pension fund, decided to invest in 24,500 shares of MicroStrategy, mirroring a similar action by other entities.
Participants in the market consider investing in MicroStrategy as essentially a high-stakes wager on Bitcoin, given that they issue corporate bonds and stocks to continuously purchase Bitcoin using the funds raised.
Starting in October, Jimmy Patronis, who oversees the financial health of Florida’s public retirement funds, started championing the idea of these funds investing in Bitcoin.
In November, a UK pension manager named Cartwright revealed they had invested 3% of their funds into Bitcoin. At that time, Sam Roberts, their director of investment consulting, pointed out Bitcoin’s “unusual risk-reward balance” as the primary reason for this investment decision.
Roberts expressed his pride in taking the initiative on this innovative step, hoping it sets a precedent for more institutional investors in the UK. He strongly encourages fellow fund managers to consider expanding their investments to include Bitcoin.
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2024-12-12 22:29