Australian Pension Fund considering to invest in cryptocurrency in Future

According to the Financial Times, Australia’s fifth-largest pension fund, Queensland Investment Corporation (QIC), is considering investing in cryptocurrencies in the future. According to the report, the head of currencies at QIC, Stuart Simmons, said that as the crypto space matures in terms of regulation and infrastructure, major retirement funds will likely seek out exposure.

The QIC, which manages assets valued at about $80 billion, is a significant investor in publicly listed firms in key economies throughout the world. The QIC invests primarily in fixed-income and equities. If there is a liquid, regulated market for cryptocurrencies, the fund will consider investing in them, according to its head of currencies.

Pension funds considering venturing into crypto market

QIC is one of a number of major retirement funds that are considering investing in cryptocurrencies. Canada’s second-largest pension fund, CDPQ, has also joined the crypto craze this week. It co-led a $400 million funding round for Celsius Network, a cryptocurrency lending firm.

There are several compelling reasons for pension funds to avoid investing in the cryptocurrency and blockchain sector. The market is still too young, unpredictable, and complex. Furthermore, the industry’s regulatory framework has yet to develop.

Pension funds are having trouble finding investments that pay high-interest rates. Fixed-income products like long-term government bonds are not paying much, and inflation is rising. In the United States, a balanced retirement portfolio provided an average return of 4.9%, significantly lower than in prior years. Public sector pension funds have seen their assets shrink as a result of an underperforming stock market and falling property values in Australia. In general, investments in both equities and bonds have been disappointing across the world.

It’s no surprise, then, that pension funds — the most conservative of institutional investors — are now taking a closer look at the exploding crypto/blockchain sector.

There are two primary reasons why pension funds might invest in cryptocurrencies. One is that the business logic is compelling, and the second is that the crypto sector has advanced to the point where its basic concepts may be trusted as it becomes regulated and infrastructure develops.

Early adopters

The Fairfax County Police Officers Retirement System is a police retirement fund based in Fairfax, Virginia. It is one of the first to invest in blockchain businesses. Katherine Molnar, the fund’s chief investment officer, says that they started investing into cryptocurrencies last year. They put 0.5% of their money into a cryptocurrency-investing fund.

What kind of crypto allocation is best for a pension fund in today’s market? What kind of crypto allocation is best for a pension fund in today’s market? In 2017, an academic paper on cryptocurrency and pension funds was written by Jim Kyung-Soo Liew. According to the paper, a 1.3% Bitcoin allocation would be “optimal” to reap rewards.

There are risks with buying cryptocurrencies. But there is a chance you will earn more money. As the industry matures, it will be safer to invest in cryptocurrencies. People may put their pension money into cryptocurrencies because they can earn more money.