According to the announcement published by the Korea Economic Daily, the Korea Teacher’s Credit Union (KTCU), the second largest institutional investor in South Korea, is planning investing in Bitcoin as part of its balance sheet.
The public pension fund would not buy Bitcoin directly, but would get involved in it through investment products such as Bitcoin ETFs.
The KTCU will aim to invest in a Bitcoin Exchange Traded Fund when the first Korea-based company launches a Bitcoin ETF in the first half of 2022. Of course, Mirae Asset Global’s investment is preparing to launch BetaPro Inverse Bitcoin ETF anytime next year.
Korea Teacher’s Credit Union is said to be the first pension fund in South Korea to invest in Bitcoin. However, the amount of funds to be invested and the exact time of launch are still unclear.
A KTCU official spoke about the development, stating that the institute plans to consult with local asset management companies before making a decision on asset allocation.
“Since there are some well-made cryptocurrency-linked ETF products from asset managers like Mirae Asset Global Investments from Korea, we plan to invest in the ETF products after consulting with domestic asset managers,” said the KTCU spokesman.
KTCU is South Korea’s first pension fund with $ 40.2 billion in assets under management.
The pension fund currently has 40% of its investments in alternative investments, 9% in international and 10% in domestic stocks. The KTCU will also use the overseas stock accounts to invest in Bitcoin-related ETF assets, the Korea Economic Daily said.
Crypto has a place in the portfolio of pension funds
The Korea Teacher’s Credit Union decision comes at a time when the widespread adoption of crypto around the world is growing significantly, particularly among pension funds.
Bitcoin has seen massive growth over the past year, significantly outperforming the S&P 500. Several experts state that the reason for this growth may have contributed to lower short-term stock market returns, fears of inflation, and investors looking for higher returns from alternative investments.
Bitcoin is increasingly becoming a larger part of several institutional portfolios, including pension funds.
As Blockchain.News reported in February, the California Public Employee Retirement System (CalPERS), the largest state pension scheme in the United States, recently announced that it had purchased its investment in RIOT Blockchain Inc, a publicly traded Bitcoin mining company, from 49,000 US Dollar in 2017 has increased to $ 1.6 million in 2020.
Pension funds like CalPERS have typically sought higher investment returns by investing in private equity. In recent years, however, private equity returns have underperformed the S&P.
As a result, institutional investors are showing increasing interest in even riskier assets that may generate higher returns. That search has resulted in state pension institutions such as the Fairfax County Employee’s Pension System in Virginia and the Police Officers Pension System and the University of Michigan Pension System announcing plans to invest in Bitcoin and other crypto assets.
Last week, Houston’s Firefighters Relief and Retirement Fund invested an undisclosed amount of its funds in Bitcoin through institutional bitcoin service provider NYDIG.
A few days ago, the crypto space got its long-awaited ETF products, and two US Bitcoin-backed ETFs have already been launched, further increasing the adoption of cryptocurrencies.
With the success of the ProShares Bitcoin Strategy EFT, which amassed more than $ 1 billion in assets in just two days, the chances are higher for the queue of other companies hoping to get into the sector.
The Valkyrie Bitcoin Strategy ETF started trading on the Nasdaq exchange last Friday, with 3.1 million shares changing hands on that day alone.
All of this shows great interest among investors looking to invest in Bitcoin and other cryptocurrencies.
Image source: Shutterstock