In a recent press release, the Government Pension Investment Fund (GPIF) disclosed its intention to explore the feasibility of including Bitcoin and other commodities such as farmlands, forests, and gold in its investment portfolio. This move marks a significant departure for the fund, which typically focuses on traditional assets like domestic and international stocks, bonds, and financial instruments to achieve optimal risk-adjusted returns while adhering to its investment guidelines and risk management principles.
The decision to consider Bitcoin and commodities comes amidst a notable surge in the Bitcoin market and the success of spot Bitcoin ETFs in the United States. The increasing participation of traditional institutional investors in the Bitcoin market has fueled global interest in cryptocurrencies.
As of December 2023, GPIF reported a remarkable 20% increase in total assets under management (AUM), reaching 224 trillion Yen (approximately $1.489 trillion), solidifying its position as the world’s largest pension fund.
The growing interest in Bitcoin is underscored by a surge in global demand for the asset class, with Japan ranking second in terms of crypto transactions across Eastern Asia in 2023, exceeding $100 billion, according to a Chainalysis report.
With a keen eye on the evolving landscape of crypto assets, GPIF is actively seeking comprehensive information on the nature of Bitcoin and other potential assets, as well as the mechanisms involved in their integration into pension funds worldwide.
This move by GPIF follows notable instances of pension funds embracing Bitcoin, including the Houston Firefighters’ Relief and Retirement Fund’s $25 million investment in collaboration with NYDIG in October 2021, and pension funds in Virginia disclosing plans to allocate $50 million to various cryptocurrencies.
While previous incorporations of Bitcoin into pension funds have been sporadic, the emergence of spot Bitcoin ETF products offers a more accessible avenue for traditional funds to engage with BTC. Recently, the Arizona State Senate approved a bill to explore the inclusion of Bitcoin ETFs in retirement portfolios, signaling a broader acceptance of cryptocurrencies in institutional investment strategies.
