Japan’s state pension fund, the Government Pension Investment Fund (GPIF), is considering exploring bitcoin as a potential portfolio diversification tool. With $1.4 trillion in assets under management, the GPIF is the world’s largest pension fund and is seeking information on bitcoin and precious metals like gold as it looks to adapt to changes in society, the economy, and technology.
While the GPIF currently invests in a variety of assets such as domestic and foreign bonds, stocks, private equity, real estate, and infrastructure, it does not currently hold bitcoin or precious metals. The fund’s interest in bitcoin comes as other pension funds, such as the Houston Firefighters pension fund and South Korea’s National Pension Service, have already started investing in crypto-related assets.
Bitcoin has long been hailed as an ideal investment for pension funds due to its low correlation with traditional assets. However, it is worth noting that bitcoin has tended to move in tandem with technology stocks in recent years. Despite seeking information on bitcoin, the GPIF has made it clear that there is no guarantee it will choose to invest in the cryptocurrency once the evaluation is completed.
The announcement from the GPIF comes on the heels of the Japanese cabinet signing a bill that allows venture capital firms and investment funds to hold crypto assets. While the bill has yet to be passed by parliament, it signals a growing acceptance of cryptocurrencies in Japan’s financial sector.
Overall, the GPIF’s interest in bitcoin reflects a broader trend of institutional investors exploring digital assets as a way to diversify their portfolios and potentially generate higher returns. As the world’s largest pension fund, the GPIF’s potential entry into the bitcoin market could have significant implications for the cryptocurrency industry as a whole.