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Japan’s Government Pension Investment Fund (GPIF) is considering Bitcoin (BTC) as a potential investment diversification tool amid economic and technological changes.
Japan’s Government Pension Investment Fund (GPIF), known as the world’s largest pension fund, is considering Bitcoin as a potential diversification tool, according to an announcement on March 19. GPIF has announced plans for a new long-term investment strategy in light of the major social and economic changes brought on by rapid technological advances.
To address these evolving challenges, GPIF has launched a five-year research initiative aimed at discovering innovative investment diversification methods. This initiative focuses on sustainability and risk management.
As part of this effort, GPIF is seeking information on products with diversification potential, including assets that it does not currently hold as they are considered illiquid. Some of these assets include cryptocurrencies such as Bitcoin, precious metals such as gold, and other types of assets.
This recent announcement from GPIF is intended as a request for information and does not confirm that the fund will expand into these assets in the future. The decision to conduct further investigation will be based on the data collected through this request.
What is the world’s largest pension fund?
Established by the Japanese government in 2006, GPIF’s investment strategy has traditionally focused on core infrastructure funds that support important socio-economic activities. The fund diversifies its investments into alternative assets such as infrastructure and real estate, as well as traditional assets such as domestic and international stocks and bonds.
The report emphasized the fund’s goal of leveraging a long-term investment horizon to achieve stable and efficient returns despite short-term market price fluctuations. As of December 2023, GPIF manages a total of 225 trillion yen ($1.54 trillion) in assets, securing its position as the world’s largest pension fund.
While GPIF is in the preliminary stages of considering incorporating Bitcoin into its portfolio, some global pension funds have already begun investing in Bitcoin-related assets. For example, in November 2023, South Korea’s National Pension Service announced it would acquire more than 280,000 shares of U.S.-based Coinbase.
The Securities and Exchange Commission’s approval of the U.S. Bitcoin spot exchange-traded fund (ETF) in January lends credibility to the world’s first virtual currency, potentially inviting major financial institutions to participate. Following approval, daily Bitcoin ETF inflows exceeded $1 billion earlier this month.
Featured image: Ideograms
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