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World’s Largest Pension Fund Considers Bitcoin Investment
- The largest pension fund in the world is controlled by the Japanese government and contains over AUD $2.5T in assets.
- Thanks to sweeping technological and social changes, the fund – GPIF – is considering new assets as part of its diversification model.
- Particularly, the fund will look at Bitcoin, cryptocurrencies and precious metals as potential long-term additions over a five-year research period.
While Vanguard, the US financial giants, stick their fingers in their ears and scream “la la la”, the world’s biggest pension fund is considering adding Bitcoin to its portfolio.
Related: Standard Chartered Upgrades Year-End Outlook with Bullish Bitcoin Forecast
Although several TradFi institutions have steered clear of BTC as a long-term prospect – largely due to its volatility and speculative nature – the Japanese Government Pension Fund (GPIF) announced changes to its investment thesis yesterday. Part of those upheavals included the potential addition of Bitcoin in the medium-term.
Five-Year Plan to Investigate and Mitigate
In general, the Japanese economy has been moving at a snail’s crawl ever since the housing crisis in the late 80s. To address some of the long-standing issues, the Japanese government is making sweeping changes to its pension funds to ensure citizens are well-protected in retirement. The announcement noted that such considerations were necessary:
[Due to]…major changes in the economy and society, and rapid technological progress.
Japanese Government Pension Fund (GPIF) Previously, the GPIF was heavily invested in vital infrastructure – so public-facing sectors like healthcare and so on. In general, the fund focusses on diversification to ensure that it takes on the least risk possible. This means the GPIF also holds assets across many different classes, including property, stocks and debt. All up, the GPIF is worth about USD $1.54T (AUD $2.36T).
And now, the government is planning to shake things up by researching several new, alternative assets that may make viable additions to the fund.
Related: AVAX Soars as ANZ Bank, Chainlink and Avalanche Explore New DeFi Frontiers
The five-year plan will have analysts and experts observe the potential risk and long-term viability of diversification options – especially in the tech sector. So while precious metals will be part of the research, it seems that cryptocurrency (especially Bitcoin and tokenised assets) are to be a significant focus.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
