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Bitcoin in Japan: Will Largest Pension Fund in the World Invest in BTC?

Last Updated March 20, 2024 3:37 PM
Eddie Mitchell
Last Updated March 20, 2024 3:37 PM
By Eddie Mitchell
Verified by Peter Henn
Key Takeaways
  • The wealthiest pension fund in the world is seeking information on new investment strategies, including Bitcoin.
  • Newly proposed regulation amendments could be the key to seeing the fund buy into Bitcoin and crypto.
  • Public pension funds are slowly warming to crypto around the world.

The Government Pension Investment Fund (GPIF) of Japan, the largest in the world, is eyeing information  on “illiquidity assets” such as Bitcoin as it looks into new investment avenues.

As part of a new long-term directive to research, discover, and adopt new investment policies and diversification strategies, the fund with approximately $1.5 trillion in holdings could soon be adding crypto assets to its portfolio.

Bitcoin in Japan’s Pension Portfolio

As per the release  from the GPIF, the fund is looking to conduct a major research effort in response to major global changes economically, socially, and technologically.

A five-year research plan is now underway with hopes of uncovering new opportunities and preparing for future changes. This includes soliciting information on low-liquid and illiquid assets currently absent from its portfolio. These include precious metals like gold and silver, as well as cryptocurrencies like Bitcoin.

The news comes as the price of BTC slumps amid what many believe to be a pre-Halving market correction. As a result, it could be an opportune entry point for investors.

There is no clear indication of whether or not the GPIF will invest in Bitcoin. However, the news follows some interesting developments. Recently, a proposal  to allow institutional investors to directly hold crypto in their portfolios made its way through the government. Now, it is now up to the Japanese parliament to approve it.

Crypto Regulation in Japan Matures

Though it doesn’t consider crypto to be a legitimate currency, Japan was one of the earliest to recognize the likes of Bitcoin as a means of payment and establish robust stablecoin regulations, seemingly regulating the sector without too much trouble.

Most recently in February 2024, a recent push  by the Japanese government to revise economic reforms could see venture capital firms and investment funds be allowed to directly hold crypto assets. This means that the GPIF could do so.

The GPIF is a government-established but independent public pension fund, as well as being the largest pension fund in the world. Therefore, it is only natural for there to be skepticism, or at least a very cautious approach when it comes to investing in volatile crypto assets.

However, should the bill  pass in Parliament, crypto and Web3 overall will see a huge boost in Japan. It will also increase the potential of institutional-grade crypto investment products being created in the country. Not only that, but it should also pave the way for the GPIF to gain exposure to crypto in one way or another.

Pomp on US Pension Funds

A few weeks ago, known investor Anthony “Pomp” Pompliano recently took to social media to explain the current situation of public pension funds in the US, and how many have missed out on a tenfold increase.

In a 2018 blog post , Pomp outlined that if a fund allocated 1% of investments to Bitcoin at $4,000 per BTC, the pension’s total assets would see a 25% increase if BTC hit $100,000.

Referring back to this, he highlighted  two pension plans that listened. He claimed they were the first US-based public pension funds to do so. Having reportedly bought in early 2019 for under $6,000 a piece, those funds now have 10 times their investment.

The GPIF’s interest in digital assets is timely. Institutional interest is on the rise following the approval of spot Bitcoin exchange-traded funds (ETFs) in the US.

This new precedent of crypto approval is seeing a domino effect. For example, the London Stock Exchange (LSE) which is now accepting applications for institutional crypto investment products while regulators ease restrictions on institutions.

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