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With cryptocurrencies becoming more and more widespread, traditional financial institutions have started to include digital assets in their investment portfolios. Pension funds in different countries around the world are either directly investing in cryptocurrencies or evaluating such opportunities. As of 2024, the countries where pension funds are considering or already investing in cryptocurrencies stand out.
Many countries, notably the United States (US), are considering cryptocurrency as a potential asset for diversification in their pension funds. Likewise, pension funds in the United Kingdom and are showing a growing interest in crypto investments. While the adoption of cryptocurrencies is still in its infancy, there is growing interest in cryptocurrencies among institutional investors in the UK.
In this context, the UK experienced a first and an anonymous investor took an important step by allocating 3% of his assets to Bitcoin. This situation has brought about various debates. While some experts consider this step to be risky, many experts describe it as a bold and strategic move. Experts criticized this decision due to the volatile nature of Bitcoin, arguing that it poses risks for pension funds. However, many experts believe that Bitcoin can be a logical choice in pension portfolios with a diversification rate between 1% and 5%.
Sam Roberts, Director of Cartwright Investment Advisory, one of the proponents of this issue, stated that the addition of Bitcoin to pension funds can increase the diversity of the fund and provide significant gains with controlled risk management. On the other hand, Chris Barry emphasized that pension funds in the UK have explored cryptocurrencies less than pension funds in the US, and that Bitcoin is supported by broader economic factors. In this context, Barry stated that UK pension funds should be inspired by the examples in the US.
Major Countries Showing Interest in Cryptocurrencies in Pension Funds Worldwide
In 2024, many countries around the world began to recognize cryptocurrencies as a viable investment vehicle for diversifying pension funds and included them in their portfolios. The countries that stand out are:
- USA: Many pension funds are considering cryptocurrencies as a potential asset for diversification purposes. Fidelity Investments offers Bitcoin investment options for pension funds, while the US state of Wyoming has adopted a regulation allowing public pension funds to invest in cryptocurrencies.
- United Kingdom: An anonymous investor took the remarkable step of allocating 3% of his pension fund assets to Bitcoin.
- Canada: The Ontario Teachers’ Pension Plan (OTPP), one of Canada’s largest pension funds, invested $95 million in Bitcoin infrastructure provider Blockstream.
- Germany: BaFin, Germany’s financial regulator, has approved investment products involving cryptocurrencies, and some pension funds have started investing in digital assets.
- Switzerland: Pension funds in Switzerland are experimenting with blockchain and crypto-related products.
- Australia: The Australian Prudential Regulatory Authority (APRA) is working on guidelines for Bitcoin ETFs and cryptocurrency investments.
- Japan: Japan’s Government Pension Investment Fund (GPIF) is examining cryptocurrencies as a potential investment vehicle.
General Evaluation
While acknowledging the risks, the addition of Bitcoin to pension funds is considered a diversification strategy. Pension funds around the world have begun to embrace cryptocurrencies as a viable investment vehicle. Bitcoin plays a key role in this transformation. Countries such as the US, the UK, Canada, Germany and Australia are leading the way in integrating cryptocurrencies into pension funds. The increase in such investments has the potential to lead to significant changes in the pension fund industry as well as in the traditional financial world.
