Australian retirement fund (pension fund) grows to 90 billion yen due to increase in virtual currency holdings

Virtual currency holdings increased 5 times in 4 years

On 26 November, the Australian Taxation Office released statistics on asset management for retirement self-managed super funds (SMSFs).

It was found that asset management allocation to crypto assets (virtual currency) increased approximately five times in the four years from 2019. In the quarter ending September 2023, it held a total of 97 billion yen (approximately A$992 million) worth of virtual currency.

Rapid increase in 2021 during bull market

In particular, asset allocation to virtual currencies increased in 2021. From approximately 20 billion yen (A$200 million) in the first quarter of 2021 (January to March) to approximately 156 billion yen (A$1,594 million) in the second quarter of 2021 (April to June) is rapidly increasing.

The crypto asset (virtual currency) market is soaring in 2021, the year after monetary easing and halving after the coronavirus shock, and in March of the same year, Elon Musk, CEO of electric car giant Tesla, announced that he would accept Bitcoin (BTC) payments. Acknowledgment is also a factor in the rise.

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Since then, the amount of virtual currency held by Australian SMSFs has remained at a high level, but in the second quarter of 2022 (April-June), it increased from approximately 153 billion yen (A$1.563 billion) in the previous quarter. It plummeted to approximately 100 billion yen (A$1.024 billion).

This coincides with the time when the collapse of the old Terra ecosystem in May 2022 caused turmoil in the cryptocurrency market. Since then, it has continued to decline slowly, reaching approximately 97 billion yen (approximately 992 million Australian dollars) as of the end of September of this year.

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Danny Talwar, head of tax at UK crypto tax firm Koinly, said cryptocurrencies are the fastest growing asset class for SMSFs. The category with the largest asset allocation for SMSFs was listed stocks, which grew by only 28% over the same period.

However, as of the end of September this year, cryptocurrencies accounted for only 0.1% of the total net assets held by Australian SMSFs.

Situation of pension funds in Canada and South Korea

In addition, in 2022, Canadian pension funds are reconsidering their cryptocurrency investments in response to a series of bankruptcy of cryptocurrency companies.

Canada’s Ontario Teachers’ Pension Plan (OTPP) recorded a loss of approximately 13 billion yen due to purchasing shares of the bankrupt FTX. Since then, it has been reported that the company has refrained from investing in the virtual currency sector.

Additionally, Canada’s largest pension fund, CPP Investments, has disbanded its team considering investing in cryptocurrencies.

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Meanwhile, in November of this year, it was revealed that South Korea’s public pension system, the National Pension Service (NPS), had purchased 3 billion yen worth of shares in Coinbase, a major U.S. cryptocurrency exchange. They are getting an unrealized profit of about 40%.

connection: South Korea’s National Pension Service invests 3 billion yen in US Coinbase stock, about 40% unrealized gain

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