Pension Funds Jump into Crypto Investing

The announcements of crypto-related news seem to pop out like mushrooms to the point that they hide significant developments—an example. It’s time that Pension Fund Tests the Cryptocurrency. Recently the Houston Firefighters Relief and Retirement Fund revealed it began investing in cryptocurrency. The reason given was that the fund’s managers could no longer avoid the emerging asset class. The Australian Queensland Investment Corporation, the fifth-largest, appears to be attracted. So, we can say that Pension Funds Jump into Crypto Investing.

Fear Of Missing Out

The most important Token and Coins appear to be going between one high and the next this year. Bitcoin has nearly doubled since the beginning of the year and is currently close to its all-time high of $67,000. Smaller cryptocurrencies have seen gains of up to percent in the past year. This is a massive dose of FOMO and the fear of not participating from the heart of investors.

Endless Possibilities

Pension funds are not putting off when it comes to taking part in the capital gains of major cryptos and related platforms. The Canadian Caisse de depot et placement du Quebec (CDPQ), known for its extreme caution, has recently invested in Celsius Network (paywall), a cryptocurrency platform.

What happens to Swiss pension plans? The situation is not as it should be without the regulators’ approval. The director of the supervision authorities, Roman Saidel, told finews.com that the potential to invest in cryptocurrencies is present, but they will be classified as alternative investments’>>. Pension funds could give up to 15% of the assets they have to be invested in them. Also, it means that cryptocurrency investment is not a problem. Everyone hears the news that now the Public Pension Fund Invests in Bitcoin.

Bank Interest

Seidel admits that there have been bank inquiries regarding cryptocurrency investments due to their desire to pitch institutions with investment concepts. Finma, when contacted by finews.com, suggests that questions relating to pension funds must be directed to the relevant supervisory authorities. A media spokesperson added that the company says it hasn’t received any inquiries from pension fund managers about cryptocurrency. Much depends on the quality of the assets as well as the internal requirements for balance sheet policies, The spokesperson added.

Theft And Volatility

However, are capital investments in crypto an excellent idea? Seidel warns against the current hype surrounding crypto, warning there is a risk of losing everything possible. In addition, they could be taken. Also, high volatility is an issue, especially with regard to the new regulation of cryptocurrency. The effects of high volatility on investments should not be dismissed lightly. Pension fund regulators are always keeping an eye on diversification. The risk of investing in one cryptocurrency is hard to view in this light. What’s needed is more pools of investments. However, in the end, the boards of pension funds will have to determine by themselves which risks are most appropriate for their specific needs, Saidel continues.

Not Written In Stone

Also interesting is that the limit of 15 percent isn’t set in stone. The limit can be lowered in the event that a pension plan can justify it, as with younger groups of insured members. But the mindset has to be changed. In examining pension fund assets, it is evident that alternative investments>> such as hedge funds and private equity make up only 7.6 percent of pension funds’ assets. Pension fund managers have the potential to invest as much as fifteen percent of their funds, but they’re not making the most of the opportunity at present. The expected return for these assets relative to risk isn’t likely appealing enough. Saidel believes.