Australian pension fund with €60 billion in assets has crypto market in its sights

One of Australia’s largest pension funds has its sights set on the crypto market and plans to make some initial small investments. Which once again shows that the traditional financial world is slowly but surely starting to take bitcoin and other cryptocurrencies seriously. In this case, it concerns the Queensland Investment Corporation (QIC), which has assets under management for almost 60 billion euros.

A number of private investment parties and so-called family offices in Australia have already taken the step towards crypto and now it is the turn of the pension sector. The positive thing about this development is that in this way an economy becomes so dependent on the future of the crypto sector that the chance of a future government ban is reduced. A development that we applaud in several ways.

Rather a trickle than a flood

We should not think that a tidal wave of pension money will immediately flow towards bitcoin, according to Stuart Simmons of QIC it is still too early for that. In principle, his company is in any case concerned with a few attempts that could lead to more in the future. “It is still uncertain how governments and regulators will respond to developments within the industry,” Simmons said.

For the generally conservative pension managers, a step towards this market is therefore a complete change of strategy. Although the argument of a small allocation can fit well with the conservative attitude. For example, if you put 1 or 2 percent of your assets in bitcoin, you limit the potential loss and you participate a bit. With that you in fact almost take out a kind of insurance on the potential success of bitcoin.

Many traditional financial parties initially seem to opt for this strategy. Especially because it is difficult for many fund managers to take large risks with assets that have not yet proven themselves. For us, an investment in bitcoin may be a piece of cake, but for the traditional financial sector it is very different.

More and more pension funds are taking the step towards crypto

There are only a few pension funds that have made the step towards crypto, but in the American Virginia there are already two that have done it and Canada also has one large party that has invested in the industry. Canadian CDPQ, the number two in that market, recently participated in an investment round of more than 350 million euros in the crypto lending platform Celsius.

In Europe, that seems even more difficult for large fund managers, given the current legal uncertainty surrounding the sector and the possible reputational damage that a loss-making investment could cause. That caution is in keeping with Europe’s down-to-earth culture and is understandable in that sense, but it can also mean that you have to join this type of innovation at the back of the row once it’s an established industry.

According to Simmons, big money is by definition waiting for more clarity about the legal side of the story so as not to fall victim to possible market manipulation. A significant part of the market is still under limited supervision and that offers scope for practices that many large funds are not keen on.

–