Institutional investors seem to be flocking into the bitcoin market. KiwiSaver Growth Strategy is a $350 million retirement plan that is managed and operated by New Zealand Wealth Funds Management. KiwiSaver seems to have created some exposure to Bitcoin in October 2021.
It has allocated around 5% of its assets to bitcoin (BTC) which underscores the strong sinvolvement of institutional investors in the digital asset space. BTC’s striking similarities to gold were seen to be the biggest reasons for entering the trade, based on a statement by James Grigor, the chief investment officer at New Zealand Funds Management. He told Stuff, a New Zealand news agency:
“If you are happy to invest in gold, you can’t really discount bitcoin.”
Grigor also said that bitcoin will be featured in many other KiwiSaver products in the next 5 years. He explained that his company acquired bitcoin for the first time Last October when it was valued at $10,000, to execute that trade, New Zealand Fund Management changed its offer documents to support crypto investments.
BTC’s price peaked above $61,000 earlier this March which would have given KiwiSaver a 500% profit within 5 months. Although BTC’s price has moderated in the last week, the pension fund is sitting on huge bitcoin profits.
Grigor highlighted that:
“KiwiSaver is majority built up through traditional asset classes but other opportunities present themselves. In the case of Bitcoin, it’s an asset class that could help give people the best retirement they can get through its aggressive compounding.”
The hedge funds and family offices have been embracing bitcoin to a large extent. But, pension funds are maybe the slowest to adopt the digital assets. The increase in institutional onramps may help accelerate the adoption narrative.
In the US, Grayscale has highlighted that the pension funds are already investing in the digital assets. Michael Sonnenshein, Grayscale’s CEO, stated:
“The sizes of allocations they are making are growing rapidly as well.”