The largest pension fund in the world, Japan’s Government Pension Investment Fund (GPIF), is examining Bitcoin as a possible diversification tool and is willing to learn more about the cryptocurrency.
The GPIF made an official declaration on March 19 regarding the formulation of fresh long-term investment strategies in light of “significant transformations in the economy and society, as well as swift technological advancements.”
Given the emerging challenges, the GPIF is initiating a five-year research initiative to investigate novel investment diversification approaches, emphasizing risk management and sustainability.
The GPIF has requested data on prospective investment diversification tools, including information regarding the company’s non-held “illiquid” assets, as part of the plan. The announcement notes that such assets include cryptocurrencies such as Bitcoin and precious metals such as gold.
The new announcement from GPIF is merely a request for information and does not indicate that the organization will eventually expand into new assets such as Bitcoin. On the contrary, the organization will deliberate on the feasibility of undertaking further investigations grounded in the gathered data.
The Japanese government established the GPIF in 2006; its primary investment objective is core infrastructure funds, which acquire assets indispensable for economic and social activities.
The organization currently invests in diversification across conventional assets, including foreign and domestic equities and bonds, infrastructure, and real estate.
GPIF emphasized in its 2022 annual report that diversification is its principal investment strategy, stating:
“Our primary investment strategy is diversification by asset class, region, and timeframe. While market prices may fluctuate in the short term, GPIF will take full advantage of our long-term investment horizon to achieve investment returns in a more stable and efficient manner […]”
As of the conclusion of December 2023, the GPIF had 225 trillion Japanese yen ($1.54 trillion) in total assets under management, positioning it as the largest pension fund globally.
Some global pension funds have already incorporated Bitcoin-related assets, whereas the GPIF is just beginning to consider the possibility of including Bitcoin in its portfolio.
The National Pension Service of South Korea declared the acquisition of more than 280,000 shares of Coinbase, a company headquartered in the United States, in November 2023.
