The world’s largest pension fund considers diversifying into bitcoin

The world’s largest pension fund, the Government Pension Investment Fund of Japan, is interested in learning more about Bitcoin as a potential tool for diversification. The world’s largest pension fund, the Government Pension Investment Fund (GPIF), is considering Bitcoin as a possible diversification tool. On March 19, the GPIF declared that it was developing new long-term investment plans in response to “major changes in the economy and society, as well as rapid technological progress.” In response to these new difficulties, the GPIF has launched a five-year research programme to investigate novel ways to diversify investments, with a focus on sustainability and risk management.

As part of the plan, the GPIF has requested data on several prospective investment diversification techniques, as well as information on assets that the corporation considers “illiquid” and does not own. The declaration mentions cryptocurrencies like Bitcoin, precious metals like gold, and other assets. GPIF’s recent announcement is a call for information and does not imply that the company would grow into other assets such as Bitcoin in the future. Instead, the organization will assess whether to perform more study using the obtained data.

Approached the GPIF for comment on its planned entrance into Bitcoin, but had yet to get a response as of writing. The Japanese government established the GPIF in 2006, and its primary focus is on investing in core infrastructure funds, which invest in assets critical to social and economic activity. Currently, the company invests in both traditional assets like domestic and foreign equities and bonds, as well as nontraditional assets like infrastructure and real estate. GPIF’s 2022 annual report emphasizes the company’s fundamental investment strategy of diversification across asset classes, regions, and timeframes. While market prices may change in the short term, GPIF will capitalize on our long-term investment horizon to produce more consistent and efficient investment returns. As of December 31, 2023, GPIF’s total assets under management were 225 trillion Japanese yen, making it the world’s largest pension fund. While GPIFs are only beginning to consider adding Bitcoin to their portfolios, certain global pension funds have already accepted Bitcoin-related assets. In November 2023, South Korea’s National Pension Service announced the purchase of about 280,000 shares.

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