Bitcoin Forum

We are seeing many investors and funds using or describing the Bitcoin as a store of value against Fiat's excessive inflation.


The opportunity will be good for those who continue, as extreme volatility will be encouraging, whether the price of the cryptocurrency rises or falls

read it https://www.1olay.com/2021/03/the-new-zealand-pension-fund-announced.html?m=1

I went to the link and it does not mention that the pension fund announced rather it's a whole different story. Pension fund made it's investment later,after the manager who Invested at 10k got immense profit.
So it was rather the manager who invested millions and that too when the price was around 10,000$, which means that he did make a lot of profit.
Now the company did invest 5% in Bitcoins but they are ofcourse receiving backlash from traditional Investors.
Some more insights, into the company:


They think the pensioners can receive not only profits but also real world usage of this particular Crypto.

First, it should be emphasized that this is not a large investment (if we look from the perspective of large investors), but a test driven probably by speculation that pension funds around the world allocate part of their assets to Bitcoin and some other cryptocurrencies. Such funds are looking for opportunities for long-term and stable returns, and if the term digital gold is increasingly used when BTC is mentioned, we should not be surprised at all that such things happen.

It is speculated that a significant portion of the investment that goes through Grayscale is actually partly from pension funds, and the money they keep under their control is significant. Still, it would be interesting to know what those who actually pay into pension funds think about such investments, because although none of them will complain about higher pensions, what if Bitcoin follows its usual pattern and enters crypto winter again after a while?

That's a good deal right there, even if it's a small amount compared to all the giants are putting up, it means that there are nations who are looking at bitcoin as a good thing. New Zealand is doing this, Miami mayor was considering it, we are talking about not just companies, even nations and at least parts of nations looking into it. This is a good thing for the future of bitcoin because it takes us from the dark and puts us in the light with these.

Bitcoin is getting more and more credible with these deals and I can't wait to see how they will handle it. It's of course not easy to get every nation on board with these kinds of things and expecting them to all do this, but even if few nations do this, that will be example for all the other ones to do it. It's much better than hearing some other nations considering a ban on crypto like Nigeria was considering.

Not a good idea! I am sure the fund managers have taken a calculated risk and possibly this 17.5 million is just a very minor percentage of their total asset. But still a pension fund should choose a more stable return over a highly volatile assets like bitcoin. Probably they are testing this unknown water to justify their future investments, you never know!

But mostly a pension fund must stay out of such investments which are speculative by nature. The funds are needed to secure the life of old age people, must be handled more responsibly,  I would say!

It's not matter of size, since this amount it's a tiny amount for an institution like this. But this is an interesting signal, since bitcoin have the same appeal as a precious medal/some to have in stock.
Personally I am waiting for Norge Pension Fund to made a similar move (it's the biggest Pension Fund).
In that case the price of bitcoin could easily touch new all time high and promote this type of investment even with other large Pension Fund.

I'm not sure if that's how it works if this is a traditional pension we're talking about.  If it is indeed a pension, then the pensioners will be getting cash payouts and not cryptocurrency.  The fund is just investing in things in order to make a profit, to ensure that there's enough money to pay off all of those who contributed to the fund. 

Doesn't sound like a huge fund ($350m total) but it's still pretty cool that the manager has the view of bitcoin that he has, because I don't think there are a lot of fund managers investing in crypto (yet).  The comparison to gold, though....eh.  There's so much more opportunity to make a profit with bitcoin than gold, silver, or any other commodity, and crypto is quite different than any of those other things.

Cool article and thanks for the clarification, fiulpro.

So from what I have heard, the fund (KiwiSaver Growth Strategy) has invested around 5% of its cash in to Bitcoin. In percentage and actual terms, it is huge. And if I am not mistaken, this is the first time that a government approved pension fund is making an investment in cryptocurrency. I am sure that in the long term, they will benefit from this investment. Also, many other pension funds around the world are going to take note of this investment.

And most of the previous posters missed the most important point. They made the purchase in October 2020, when the average price was $10,000 per coin. As per the current rates, their $17.5 million investment has grown to $101 million.

Small or big investment this shows how another area of investing will be conquered by bitcoin in the next years! The self-fulfilling prophecy of the asset that's becoming better than gold is here. Once more and more states start to do that I can't really think of a limit for the price.
Let them buy

Without a doubt this is a very interesting news, even if the pension fund is not really that big we know for a fact that those pension funds have the tendency of only invest in the safest assets available to them, maybe this is why they are receiving some criticism for doing this because as we know even if the people in the forum like bitcoin we know that its volatility can still be huge, what I would really like to know is what are going to be their policies if the price of bitcoin begins to go down very rapidly, are they going to sell or are they going to keep holding?

No doubt 2021 has more companies coming into crypto that previous years,  btc has won the heart of many, individuals and companies are all looking to be part of this space,
It is always good to hear such news, it gives a better understanding btc awareness is expanding and growing rapidly.

Whats the important thing here is that recognition on what bitcoin had able to attained where these pension fund is gradually recognizing it which would really be an eye opener
for others to do the same.It doesnt really matter on how small or big it as, what we do need is adoption and more exposure.Sooner or later these things will be giving out
significant effect which would really be helpful on bitcoins progress as years passing by.

This is the most important aspect if they invested the pension fund when the price was around $10k and looking now it was a genius investment as the price rallied five folds and it is one hell of a profit as they do not get these profits in any financial market and i would like to know when they will be booking their profit or they already booked their profit.

If they disclosed these before i am sure there will be questions raised on why they invested pension funds in a high volatile market.

From my part, I would say that it would be stupidity from their part not to book the profits (at least partially). If I was the fund manager, then I would easily liquidate at least 20% to 30% of the coins at the current rate. The article mentions that many of the clients were not ready with the Bitcoin investment. Selling 30% of the coins and converting it back to fiat currency would have eliminated their concerns. BTW, I checked some of the local media in New Zealand. There seems to be a lot of hype surrounding this investment.

They could do that but it isn't their money and they need to be careful as to how they are going to approach this new fund because it is new and volatile and you don't want to be on the receiving end of the allegations about skimming the fund because it is in early stages.

It’s great that The New Zealand Pension Fund invested in BTC and get huge profit. But “New Zealand currently does not have specific legislation related to cryptocurrencies.” and “Regulators have applied existing laws to cryptocurrencies, albeit the lateness of official guidance about how the regulators would view them within existing legal frameworks has caused some confusion and uncertainty.”
https://www.loc.gov/law/help/cryptoassets/newzealand.php#:~:text=New%20Zealand%20currently%20does%20not%20have%20specific%20legislation%20related%20to%20cryptocurrencies.&text=Cryptocurrency%20exchanges%20appear%20to%20be,purposes%20of%20income%20tax%20legislation .
Sounds like Regulatory Approaches to Cryptoassets in New Zealand are controversial so Pension Fund may have some problems with using their BTC.

I don't see this is as some problem... it's like you have something valuable, but you don't know how to use it, I guess they will figure that out pretty quickly!
Many companies entered crypto in the last year, but this is the first time I am reading how the government sector, in this case, the New Zealand pension fund, invests in crypto! This is risky step for them, and probably this wasn't easy decision to make!

In the end, things are moving forward for crypto... little by little the adoption is spreading on all sides! Good move for New Zealand and their people who are in pension and the ones who will be! I guess I can't expect anything similar from my country, sadly!

This is a very important detail this means that unless they sell their coins they are going to be in profits as long as they hold those coins as it is practically impossible for the price to go below those levels ever again, it will require an absolute disaster for those numbers to be part of the market again as institutional investors are never going to let their investment to reach that point, it would be interesting to see what they do from now on and see if they are still willing to buy bitcoin at a rate of close to 60k for each coin.

Wow! Good initiative of the Government of New Zealand by KiwiSaver fund by offering its pensioners savings in bitcoin. It is the first step, we just need to see how the service develops, it is very promising in my opinion.
Surely the pensioners of this country will be able to live their old age to the full. The famous golden years of tranquility and enjoyment and also available for any eventuality.

Now we can only hope for the best because this is a first and we have yet to see a 20 years for bitcoin and to see if it is a viable source for pension funds. I am both pessimist and optimist about this though, pessimist because there might be some parts or benefits of a conventional pension fund that is not included in this one, optimist because this will be another milestone for bitcoin and cryptocurrency adoption.

A great call imo.

Pension funds offer the best time horizon to enable those who hold BTC to yield the best returns, compared to actively managed/leveraged positions in the short run.

Time has shown that passive investing works, especially with BTC. Sure, in the short run there could be a ton of volatility when it comes to the price action that BTC gets on the daily, but over the long run the trajectory is undeniable. People are only going to continue to take notice at BTC as a store of value, and the increasing institutional adoption is only going to drive value up further over the long term.

The only potential concern that I would have if I was an investor would be the method by which the pension fund is holding their position. It must be made sure that they hold their own private keys - as opposed to using a third party custodial service. That would defeat the whole purpose of decentralisation.

A lot of companies are already investing in bitcoin. Its just that pension fund company like Kiwisaver used to do some traditional funds thus entering such new kind of assets is a great advantage. You see, they bought bitcoin at $10,000 last year and look at the price of it today. They made a good decision as they obviously are having a good profits by now.

At first those traditional investors will be skeptical, new things will always be in doubt but if they see how fast and how great this bitcoin investments will be, it will probably change their perspective about it will change.

That is, if the market will continue to progress throughout the years. I am not saying that bitcoin will not progress, but these institutions should very well explained to their clients about the risk they are getting into. Remember, we are talking about pension funds here. It is your retirement money. Right now, the market is looking great but they need to present a worst case scenario to these people so they are ready for what may happen in the future. They need to have contingency plans in every scenario, so they will not be caught in a very tight position. But definitely, we welcome these companies to invest in crypto market. People will trust more this crypto business if they are seeing a lot of known companies going into this new market.

I am sure that those "several investors from KiwiSaver" who are unhappy have already changed their attitude towards Bitcoin especially since they must have realized that this is a good asset to include into their portfolio. I understand that some can be expressing concern because of the high volatility of Bitcoin, but we know that the returns is so high, compared to other type of investment. They just have to make sure they have people who know what they are doing in cryptocurrency to minimize possible risks. I am not actually wondering why pension funds all over the world are now getting attracted to Bitcoin -- they know the possible profit rate will never be provided by other means.