Kiwi Fund Manager Sees Aussie Super Funds Holding Crypto Within Five Years

July 13, 2021, 10:30 AM AEST - 2 months ago

If your entire business model is centred on managing other people’s money and growing capital for the long term, bitcoin is becoming increasingly difficult for investment managers to ignore.

New Zealand’s KiwiSaver fund has invested around five percent of its money into bitcoin. The investment firm purchased bitcoin for the first time in October 2020 when it was trading at around US$10,000, meaning that KiwiSaver has already achieved substantial gains on its BTC holdings despite an almost 50 percent market dip from its all-time high of A$79,800 in April 2021.

KiwiSaver is basically the New Zealand equivalent of an Australian super fund, but with a more progressive charter. The fund is moving with the times by finding innovative ways to maximise returns for its New Zealand clients, and it recognises the long-term advantages of investing in bitcoin and other cryptocurrency assets.

Australian super funds could be next. KiwiSaver’s chief investment officer James Grigor says he expects competitors to follow suit over the next five years.

If you are happy to invest in gold, you can’t really discount bitcoin.

 James Grigor, KiwiSaver

Bitcoin Being Part of Every Super Fund Portfolio is Inevitable

The eventual adoption of bitcoin as a bread-and-butter asset in the typical retirement fund portfolio is inevitable. All that needs to happen is for the Australian Securities and Investments Commission (ASIC) to catch up and start offering a Bitcoin ETF.

If more exchange traded funds (ETFs) started investing in cryptocurrency, then super funds would likely end up holding underlying exposure to it. Australia’s first cryptocurrency ETF is pending and once the ETFs are launched, it will be far easier for investment managers to access crypto rather than having to go via an exchange.

Regulated ETFs will give investment managers the opportunity to buy at an institutional level, retail investors easy access to crypto via traditional equity platforms, and potentially have these ETFs included in broader funds and indexes as a standard part of an investor’s portfolio mix. Overnight, bitcoin can become an everyday asset in a super [fund]’s portfolio.

Byron Goldberg, country manager, Luno Australia

For now, self-managed super funds are the only means by which Australians can hold crypto as part of their superannuation. Until ASIC writes new rules around investing in crypto, the average Joe is left waiting with his future retirement savings invested in more old-school, less trendy investments, such as shares, gold and oil.

In the meantime, you can brush up on current rules for holding crypto in your super and read a Crypto News Australia comparison of five Australian super funds.

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