AMP Ltd. Allocates A$27 Million to Bitcoin Futures in Australia
AMP Ltd., a significant player in the Australian pension industry, has allocated approximately A$27 million (about $17.2 million) to Bitcoin (BTC) futures, becoming one of the first major retirement managers in Australia to adopt cryptocurrency products. This investment reflects a changing perspective on digital assets within a traditionally conservative sector.
AMP's Bitcoin Futures Investment
Steve Flegg, Senior Portfolio Manager at AMP, announced the allocation decision on LinkedIn, stating that the firm made a modest investment in Bitcoin earlier this year. A corporate representative confirmed that the investment is primarily in Bitcoin futures, with no current plans to increase this commitment.
This move follows Bitcoin reaching the $100,000 mark for the first time, increasing over 40% since Donald Trump's election victory in November. Trump has expressed support for cryptocurrencies and proposed creating a national Bitcoin stockpile, which has fueled interest in digital assets.
Despite AMP's pioneering efforts, the broader Australian pension sector, valued at A$4.1 trillion, remains cautious about cryptocurrency investments. Reserve Bank of Australia Governor Michele Bullock indicated that Bitcoin does not significantly impact the Australian economy, and regulators have emphasized the need for strong risk management practices when engaging with digital assets.
The Australian pension industry has faced scrutiny regarding valuation issues in unlisted markets, customer service, and investment fees. Recently, several pension products from AMP failed an annual performance test aimed at identifying underperforming retirement products, with some failing for the second consecutive year.
Crypto ETFs Fuel AMP’s Investment Strategy
The decision to invest in Bitcoin futures reflects the "structural changes" occurring in the digital-assets landscape, according to AMP’s Chief Investment Officer, Anna Shelley. She highlighted the recent launch of exchange-traded funds (ETFs) in the US investing directly in Bitcoin and Ethereum (ETH) as a significant development.
Following thorough testing and consideration by the investment team, AMP included a small, risk-controlled position in digital assets through its Dynamic Asset Allocation program in May. The exposure to BTC futures represents about 0.05% of AMP’s total pension assets, indicating a cautious approach to digital asset investment.
While AMP recognizes the potential benefits of cryptocurrency exposure, it remains aware of the associated risks and volatility. Shelley mentioned that although members have benefited from this exposure, the investment is part of a highly diversified asset mix and will be closely managed.
Currently, Bitcoin is trading at $99,800, reflecting a slight 1.1% decrease in the last 24 hours.
Featured image from DALL-E, chart from TradingView.com