KiwiSaver Growth Strategy, a $ 350 million pension plan operated by New Zealand Wealth Funds Management, has reportedly allocated 5% of its assets to Bitcoin (BTC), underscoring the steady stream of institutional investors moving into the digital asset space enter.
According to James Grigor, New Zealand Funds Management’s chief investment officer, Bitcoin’s striking similarities to gold were cited as one of the main reasons for entering the trade.
“If you enjoy investing in gold, you can’t really discount Bitcoin,” he told New Zealand news agency Stuff, adding that BTC will be in more KiwiSaver products over the next five years.
Grigor stated that his company first bought bitcoin in October when it was worth $ 10,000. In order to complete the trade, New Zealand fund management had to change its offering documents to allow cryptocurrency investments.
Bitcoin’s price peaked north of $ 61,000 earlier this month, which would bring KiwiSaver a 6x return in just five months. Although the price of Bitcoin has weakened over the past week, the pension fund is sitting on hefty BTC gains.
Grigor stated that KiwiSaver was “built mostly by traditional asset classes,” but noted that “other options are available”. In the case of Bitcoin, it is an asset class that, through its aggressive compounding, could help “give people the best possible retirement they can get”.
While hedge funds and family offices are steadily using Bitcoin, pension funds may be the slowest when it comes to adopting the digital asset class. The growth of institutional ramps could help speed up the adoption narrative.
In the US, Grayscale found that pension funds were already using digital assets. “The size of the assignments they make is also growing rapidly,” said Michael Sonnenshein, CEO of Grayscale.