Bitcoin Forum

New Zealand retirement fund reportedly allocates 5% to Bitcoin
https://www.nasdaq.com/articles/new-zealand-fund-manager-puts-5-of-retirement-plans-assets-into-bitcoin%3A-report-2021-03-26

We all know how much money retirement funds have, so super good they starting buying, others will follow :)

This is awesome and scary at the same time. A lot of huge companies are already trying to get a piece of the pie on large increments. Should there ever be a huge crash, we all know that these entities aren't as die-hard as most of us here, and would surely cut losses that'll send bitcoin into an even deeper pit.

Perhaps this is one of the chapters wherein bitcoin is really getting big and companies can no longer ignore bitcoin, and this is also that chapter wherein bitcoin is very fragile IMO.

Big gamble on them, but they probably play it safe by just allocating 5% of it to bitcoin. Otherwise, if we see the price suddenly goes down, we don't know if the people behind are going to hold on it or just sold because they panic.

Anyhow, this is welcoming news for bitcoin though, good exposure to say the least. And probably others might say that this could be considered as getting closer to mass adoption.

Exactly, with bitcoin not having been tested yet if it can survive for a hundred years, it will definitely scare someone but you are also right that it is awesome because this means that we can test bitcoin and its capabilities to be used as a retirement fund. We can't do much about this but to hope for the best and continue hodling bitcoin until we are satisfied with the prices.

For me it's not scary. Contrary to what you say, this type of investment funds are not going to sell Bitcoin simply because there is a moment of panic in the market, unlike what retail investors do.

To me this is good news and what I believe is that there is going to be a day in a few years when most investors in the stock market are going to be exposed in some way or another to bitcoin, either because they own a fund or stocks that have bought Bitcoin or because the companies owned allow the purchase of Bitcoin through them as happens with Paypal. This is along the lines of normalization and mass adption and is nothing but good.

Market crashes will always happen and it is one thing we cannot avoid.

I always thought that btc is too risky for such kind of funds

This is good news but NZ was not the first pension fund that invested in Bitcoin and Norwegian Government Pension Fund, better known as Oil Fund, invested in Michael Saylor's MicroStrategy back in 2020.
I would call this a smart investment and I am sure other countries will follow sooner or later, and even few percent investment will make a huge difference for Bitcoin.

Check out this Forbes article from 2019 when Bitcoin was near $4000 when even crypto sceptic Peter Tchir said that pension funds purchasing Bitcoin would push prices much higher, and that actually happened:
https://www.forbes.com/sites/petertchir/2019/02/23/pension-funds-investing-in-crypto-is-a-big-deal/

BTC has always been risky, no matter what, it's how they mitigate the risk that's it. As as you can see I would say that the investment was just a blip on their billion dollar retirement fund. Yes, it's a scary to think about retirements funds being invested on volatile asset, but they are more willing to take that risk. And pretty sure they have studied it, and we might see another first world country following what NZ and Norwegian government has done.

Pension funds hold a lot of money. The impact in bitcoin price could be huge.

However, regulations and laws do not allow them to buy bitcoin directly (at least in most countries). But I believe some of them could buy a bitcoin ETF, or a Bitcoin fund.

This is why ETFs are important for institutional investors, mostly due to regulations.

I dont think so , these funds are long term players. Even if the price tanks for in few months time or even 1-2 years time, they wont sell as the classical retail investors who are mostly investing for the short term and will get scared easily. Also they are allocating small amount of their portfolio.

Yes, I read about this elsewhere too and was pleasantly surprised that it was a backwater like New Zealand.

Not at all. A lot of these funds have an element of "total return" whereby they don't necessarily produce large returns over the long term, but predictable positive returns over any span of time.

They will use all sorts of tricks like derivatives as well as the usual instruments like bonds and equities. Although they seem boring, they are doing a lot of complex transactions to try to keep the books balanced.

Although not a retirement fund, Ruffer Ltd in the UK was the first of these sort of companies to buy into Bitcoin, and immediately took profit when it reached a new all time high.

What investment has no risk anyway?

Its the retirees last shot for investment, 5% of their retirement fund is good start to allocate for Bitcoin. Soon more nationalities from government or private sectors will be involve in this space allocating their retirement money for Bitcoin.

Even though I think they must be putting in this money after a lot of risk analysis and hedging but still I feel putting even 5% of a "retirement fund" in such a risky asset. Is it really worth it? I feel that most of the Retirement funds aim at rather plain vanilla-type returns with minimal risk so as to ensure that the hard-earned money of Employees doesn't end up being screwed. While investing in Bitcoin would be profitable in the long run yet I think it's a very brave thing to do as Bitcoin still has no established theory using which you can calculate a sort of intrinsic value for it. So the only thing these people are speculating on is Price and nothing else.

That's at least a handful I know of just from these headlines then, I thought, and then I read it's under their Labour party. Still some way of from state pension funds like Norway that started many years ago though so they're ahead of the curve. Don't believe many Kiwis would put as much as 5% though. They'd need quite a bit of majority vote at the funds and as much as I like them, can't see anyone in any financial department vote for that much allocation, so probably needs a bit more detail than this. Still, I'd love to join such a fund if I were from there;)

Bitcoin as a project keeps the world going in flames as how it came into existence and started disruption of regular banking systems that are age old. Many folks didn't put their eyes out there to the tech but they kept on waiting for the wealth in the normal thoughts they presumed but now they are seeing it in a different light as they now consider it a worthy investment for their retirement plans.

Years ago IIRC, there have been people who have already talked about this. They're putting a sum of their money to bitcoin and they'll forget it as it will serve as their retirement.

It is risky in a sense if they don't understand what bitcoin is. But if they're aware what could be the risk that it has and I guess they're ready to take it and they're fine to do so.

Wanna say the same thing on where they do risk only 5% in form of bitcoin but i do believe that once they do saw that they had already make out some increase then for sure they will allocate more.

The question is, are they aware of the risk? For sure they do because they wouldnt be putting 5% if they dont know on what theyre doing.Bitcoin is volatile and they wouldnt like to risk

out those retirement funds into something which is volatile. 5% might do but it wouldnt be bad if reconsider on putting at least 10-15%.

you have a point on that. since these companies are concerned about their financial conditions, they will have no qualms selling it when the right time for them comes. though it is good for the crypto community as they may drive more adoption as people will see that more and more big institutions are joining the crypto community. however, those people who are putting their hard-earned money whether savings or for retirement, should really think of possible repercussions of their decision. they need to present themselves the worst case scenario  here . or plan contingencies that would be their backup plan when things go sideways.

Well, perhaps bitcoin will become retirement funds if it will continuously have growth. But as above says, it is indeed a very crucial thing because you don't even know when it will crash too hard or you will perhaps lucky so much when the bitcoin price doubled as you have invested. There is a possible risk here that you should understand from the start and that is much better if you are aware in the first place. We don't know what will happen next, bitcoin will pump or dump but I have a strong feeling bitcoin will become the most popular digital asset that can store value.

This is good progress where now many more companies, institutions, and also parties have been interested in putting their money into Bitcoin.
And this may be true, will be followed by others if they make a bigger change on Bitcoin adoption.
Although it is 5%, this is also good starting at least they believe in Bitcoin as an asset for future, for investment, not only Gold that makes them worthy and interested.
But I am also thinking about it, if other companies are also starred to follow this way, will they be only in hype?
I mean, today, Bitcoin is likely in a big hype where the price of Bitcoin has been increasing so significantly multiple times bigger than last year. And when the price drops after this bullish era, what will happen to them, because sometimes, they only follow the hype and not really know about how Bitcoin mechanism. And this may also make little bit shocking condition or panic situation for them. When they panic sells all Bitcoin that they have, I cannot imagine the influence on the amrket.
But hopefully, this is not.

We hoped for mass adoption to start bottom-up, but it seems like all these institutions are going to get into Bitcoin long before average joes. I actually don't see any problem here, but still it's a bit sad that it didn't go like Satoshi and early Bitcoin enthusiasts have hoped for.

It would be super cool if they have invested when the price was low, since these are retirement funds it is kind of scary and these fund managers might not end up taking the right decision all the time. I will not suggest anyone to hold bitcoin when the price is rallying at an all time high valuation and i have no idea why everyone is suggesting to invest when the price is on a bull market and not retirement funds at this price.

5% allocation for retirement is not that risky, as long as they understand the risk, it's always worth a shot.

Not sure how they'll act during the bear market as 99% that time will come, but hopefully that would not affect their future as they made a decision during the bullish market, things could be different during the bear market especially if it will take too long before the market will start to recover again.

That's good input!

In fact, if you will look at the previous price of Bitcoin back then until now, you will see that there is a great improvement and the Bitcoin price was increased at the end even how volatile it is.  It will probably do the same in the future, though there's no infinite growth but as you can see Bitcoin always ends up having a new ATH.  So, therefore, no doubt Bitcoin is good for the retirement fund plan.  

There's always a basic law of Bitcoin, the demand and supply that makes Bitcoin becomes expensive, the more people have an awareness of this technology the more adoption we can get and it will vary the price in the market.

We know the price of Bitcoin is very volatile, this is what makes Bitcoin a high risk asset. However, allocating only 5% of the pension fund seems
safe to do so. Especially if Bitcoin continues to experience price increases, this will be very profitable. There are many positive news about
Bitcoin nowadays, this is why the Bitcoin price continues to rise. Hopefully what New Zealand does is followed by other countries, because it is very
nice to know that many parties are starting to buy Bitcoin right now.

This is a sure future security. As a salary earner or an investor it is critical to invest in coin generally most especially bitcoin investment. Most salary earners end up without any legacy or plans for the future what so ever. It is highly adviceable to invest on coins to secure and account for days of retirement and joblessness.

Although most go into other forms of investment during active days in service but in our present day society it would be adviced to acquire coins because on the long run it would appreciate and add value which could serve as a security in the future

This should be in everyone's to do list, honestly it is the best idea than keeping them in a bank where they will not yield anything meaningful for the period they are kept,
I have also applied similar approach for my future plan, btc is for the future and what better way plan your future than to start buying btc bit by bit 8)

Even though I agree with you but in reality is it really a great idea?
We don't know for sure if Bitcoin would go up or down in the future so what if they are buying it at a high price and then the price collapse for whatever reason?
I just think that something that great should really be secured not on risk on decreasing their saving.
But it is up to those who would take that plan and we all have different plan in life I just hope that we all succeed.

I do not know if it is a good idea for retirement funds to invest in Crypto currencies. Yes, we all want big institutional investors to invest in Bitcoin, but do we want the "blood" on our hands of millions of pensioners.. if something goes wrong?

Bitcoin is still a very high risk investment and very volatile and people should never go "all in" with their savings and/or pension fund money. I know all investment companies lost a bit of momentum during the Covid pandemic, but they should caution not to take too much risk to make moves like this to recover.  ::)

Only if you really are risk taker wanted to risk your pension fund in a really volatile market, despite me liking bitcoin so much I won't risk the very important money like the pension fund and invest it into any volatile market, there's reason why crypto is considered high risk high return investment as well and I think you'll be fine if it's small portion and not big amount of your pension fund. in the news they mentioned 5% of money as they are trying to gain unusually more profit from this investment than the other without having too much risk it seems.

This is good news for the cryptocurrency market, with more and more companies and institutions taking notice and accepting Bitcoin.
No doubt such news will make people more aware of the price of Bitcoin and make its price soar.

I think that is good news, but I hope they know the risk of bitcoin so they do not have to worry or panic if the price is down and make a correction many times.
Although that is 5%, the funds are big, and hopefully, that can attract more investors to invest in bitcoin.
This year will be a good year for bitcoin and with the incoming of the new investor that can give more support for bitcoin to get more adoption from the people.
It could lift the price to increase and hopefully, that can break the new ATH.

"The KiwiSaver Growth Strategy Fund, which had NZ$350 million (US$244 million) in assets at the end of December, began investing in cryptocurrency in October, according to a company product disclosure document."

is it mean 5% from $244 million? it's more than $12 million then.
they began to invest in bitcoin in October, which means they are in profit now.
bitcoin price in October 2020 = $11-12K.
bitcoin price today = $55K.
so, +400% for that big amount of money?  :o :o :o

People starting to retire at old age, and yon know what it means? how are you sure some worker will disclose their keys to their kids, how will the recipient handle with their private key, this is a good development but actually will cause more complain about wallet inaccessibility. The old papas will certainly have reluctancy in keeping their keys I think so.

Well if someone is putting all his hard earned money in bitcoin after retirement and that too at this high rate, I would say it's not a good choice.  If someone is willing to put his money in bitcoin then he must wait for this bull run to be over. The moment of making such a decision does not seem very good to me, but who knows what the situation will look like in a few years.

It does not literally mean that everyone will have their wallets, its more of the fund manager that handles the retirement funds allocate 5% of their investment in bitcoin to trade or to make it grew with bitcoin, some may go in investing in stocks or others. With this idea they can get all the possible markets that can gain profit. They sure to doit accordingly to trade well. Their fund manager should be good enough or such a risk taker to et involved their funds in crypto.

It was obvious that these big time investment firms will jump into anything that could make them a profit and that is what we are seeing here, the casual adoption did not take place as everyone was waiting for the regulations to come into effect as far as i understand nor they are not too confident in investing in a volatile market but since the institutional investors started pumping the price there is no way the casual investor will be risking their money at this valuation.

Retirement funds are usually reserved for the elderly, so I think it makes sense to spend 5% on Bitcoin.
Cryptocurrency and BTC markets are very volatile, it would be risky to invest too much in this market.

On the one hand, it's good that retirement funds are buying Bitcoin because it means there's a shift in perception of Bitcoin. As far as I know, retirement funds aren't allowed to invest in anything they feel might be profitable; these investments must be considered low-risk because a lot is at stake here. So if they're starting to invest in Bitcoin, it means they are considering Bitcoin a pretty safe long-term investment. On the other hand, Bitcoin really isn't a safe investment because it's still very volatile, and playing around with something as important as retirement funds sounds very dangerous to me. Then again, if it's just 5%, I think it's a reasonable risk to take.

Given the increase in Bitcoin's value, withdrawing funds to buy them is a really good investment. I feel happy that social security funds take notice of Bitcoin. In the long run, there may be more Bitcoin-focused social institutions or countries that invest in Bitcoin.

They could have done better and invested when bitcoin was still around 3 to 4 digit prices but I understand them that they don't see it back then as something that is profitable. It will be the only way for bitcoin because to progress, they have to touch every aspect of social and financial services.

It is super great that Nasdaq is planning retirement funds in bitcoin. This shows how fast and how well bitcoin is being adopted in the mainstream world. If they trust bitcoin enough to be used as retirement funds then it means that have come to see and realize the numerous benefits and advantages of bitcoin.
I, however, think the only issue here will be the volatility of bitcoin. As much as it possible that these retirement funds increase in value if there's an increase in the value of bitcoin which is good, it is also possible that they lose money if bitcoin is on a bearish run and in such case, many will lose money because they will panic sell

Totally agree with your opinion. Too many big guys have joined the party and when its over, things will going to be tough. Bloodbath is inevitable.

But I still believe that there are companies willing to buy more bitcoin during dip. A huge sell-off must meet its qualified resistance that keeping it from going down rapidly, even though this incident might launch long term bear run in the cryptocurrency market. It is acceptable. What goes up must come down. Crypto market is currently in the midst of bubble, so it can explode at anytime it wants. So try to profit yourself more and more before the state of the market reverse

Well, just like the others they haven't expected Bitcoin to reach this far. If we only knew that Bitcoin could reach $60,000 in a span of more than 11 years, most of us might have been heavily invested when Btc was trading at 2 to 3 digit figure, and settled for retirement benefits.
Yet nobody knows. However, it's never too late to come into Bitcoin and plan for your retirement funds.

It is good that they at least put up into an engagement those retirement funds to try out the possibilities that it can attain with regards to putting it into Bitcoin. Well, 5% seems to be playing safe but it is just that fine since it seems like they are testing it if it will be good for long term application. It is at least good to try it out putting small part for Bitcoin engagement while assessing the scenario if it will be good for long term purpose. Well, it will gladly be good once things turns out to work into their favor for they might put things up trying to increase or just settle the percentage they are putting into Bitcoin.

It's good to imagine if you got a bitcoin before it starts to the highest price right now if you see that the price when you make an investment which is on the lowest than 20k USD and then right now going upward again for the another all the high good to see your future with the Bitcoin. Again the market is volatile and I guess it's better to secure your funds until when you can hold your money we want to prevent losing up to secure our future if you have extra funds good to make bitcoin on your retirement times.

This could actually be a good thing, it just the risk of the investment may be and if the person actually likes how it would turn out, or maybe they just don't like bitcoin.

5% is not bad at all and I think it's a good percentage because it's crypto and we know how the volatility works, we just don't know how this could affect the bitcoin or the market.

These companies are now into bitcoins and cryptocurrency so manipulations are definitely a thing in the future, for a retirement thing this could actually work most of the time for the long term.

This is a huge news. Actually it shows the power of bitcoin. We all know that retired person when they got their pension they want something special where they can invest their pension and after that they will take their profit to live a peaceful life. Most of the we saw they use bank, some people’s choose real state or some people start a small shop. But they are coming in bitcoin platform it is a huge news for us. But at the same time it little bit scary to because lots of biggest company hold a huge amount of bitcoin. If they are trying to crush the market. Then it will be tough for them because they need a decent percentage of profit. But they can't give much time. Let's see what happen.