Japan’s largest pension fund to explore Bitcoin investments

Japan’s Government Pension Investment Fund (GPIF), the largest pension fund in Japan and globally, is looking to explore investments in alternative assets such as Bitcoin (BTC) and gold.

According to a Bloomberg report, GPIF revealed in a press release today that it plans to examine the possibility of accommodating Bitcoin and other commodities, including farmlands, forests and gold. The fund plans first to research the prospective investment choices.

Interestingly, this decision comes on the back of the recent Bitcoin market uptrend and the success of the spot Bitcoin ETF market in the United States. The emergence of traditional institutional investors in the Bitcoin market has sparked increased global interest.

Ordinarily, the GPIF facilitates investments in various assets, including domestic and international stocks, bonds, and other financial instruments, to achieve optimal risk-adjusted returns while adhering to its investment guidelines and risk management principles.

Per the latest data, the GPIF recorded an impressive 20% increase in total assets under management (AUM) last year, bringing the figure to 224 trillion Yen as of December 2023 (approximately $1.489 trillion). This figure makes it the largest pension fund globally.

The interest in Bitcoin has been triggered by a flush of global demand for the asset class since last year. A Chainalysis report shows that Japan received the second-highest value in crypto transactions across Eastern Asia in 2023, topping $100 billion.

Amid the growing interest in crypto assets, GPIF is currently seeking useful information on the nature of Bitcoin and the other assets under consideration as well as the mechanics involved with their incorporation in pension funds abroad.

Significantly, the Houston Firefighters’ Relief and Retirement Fund revealed in October 2021 that it had invested $25 million in Bitcoin in collaboration with NYDIG. A month before that, pension funds in Virginia disclosed plans to invest $50 million in various cryptocurrencies.

While there have been various isolated cases of these incorporations in the past, the emergence of the spot Bitcoin ETF products presents an easier way for traditional funds to bet on BTC. Recently, the Arizona State Senate approved a bill to explore Bitcoin ETFs in retirement portfolios.