AMP Becomes First Major Australian Superannuation Fund to Invest in Bitcoin
Australia's retirement fund AMP announced a $27 million investment in Bitcoin, becoming the first major superannuation fund to seek exposure to this asset class. This decision comes amid hesitation from other large funds within the $4 trillion retirement savings industry due to Bitcoin's volatility.
AMP's Chief Investment Officer, Anna Shelly, indicated that customers with assets in the fund’s balanced and growth investment options are likely to have Bitcoin exposure. She noted that the $27 million investment represents only 0.05% of AMP's $57 billion in assets under management. The purchase occurred in May when Bitcoin prices ranged between $60,000 and $70,000, as part of a diversification strategy supported by AMP's dynamic asset allocation process.
Despite AMP's investment, major funds remain cautious. Critics, including Reserve Bank governor Michele Bullock, argue that Bitcoin is unsuitable for the Australian economy, citing its instability and lack of yield production.
Globally, pension and retirement funds are increasingly exploring Bitcoin exposure, especially following the launch of regulated products like spot Bitcoin ETFs. US states such as Florida and Jersey City are considering these options. Since the introduction of spot Bitcoin ETFs earlier this year, demand has surged, with BlackRock's iShares Bitcoin Trust ETF (IBIT) leading with over $50 billion in assets under management.
BlackRock Recommends 1-2% Exposure to Bitcoin
In response to rising inquiries regarding Bitcoin investments, BlackRock officially recommended a 1-2% allocation to Bitcoin ETFs. This marks the first time the firm has specified a figure for exposure to cryptocurrency.
The report suggests that a 1-2% Bitcoin exposure could enhance a diversified portfolio and provides a structured approach for clients to incorporate cryptocurrency into their investments. Additionally, BlackRock compares Bitcoin's risk profile to that of the Magnificent Seven companies: Apple, Amazon, Tesla, Nvidia, Meta, Google, and Microsoft, justifying investments in light of geopolitical tensions and global financial system fragmentation.