National Pension Service's First Venture into Cryptocurrency Sector
Regulatory filings with the U.S. Securities and Exchange Commission (SEC) have revealed that the National Pension Service of South Korea, the world's third-largest pension fund, made its first move into the cryptocurrency sector in the third quarter of 2023. The pension fund acquired 282,673 shares of Coinbase Global, one of the leading cryptocurrency exchanges, in a transaction valued at approximately $20 million.
About the National Pension Service
Established in 1988, the National Pension Service operates as South Korea's public pension fund. Managed by the National Pension Service Investment Management (NPSIM), the scheme requires enrollment for both Korean citizens and foreign residents in Korea. With assets worth around $755 billion, the NPS is a significant player in the global pension fund landscape.
NPS Investment in Coinbase Global
According to the recent SEC filing, the NPS invested $20 million to acquire the shares of Coinbase Global. The average purchase price per share was $70.5. Since the investment, the value of the shares has appreciated by 40%. Currently, Coinbase's shares are trading at $98.15 each, reflecting a significant 26% increase over the last month.
COIN Shares as a Lower-Risk Alternative
The decision to invest in Coinbase shares aligns with a global trend where various entities opt for stocks of publicly traded companies in the cryptocurrency sector as a lower-risk alternative to direct crypto holdings. By investing in Coinbase, the NPSIM aims to minimize the potential volatility associated with holding cryptocurrencies directly while still benefiting from the growth potential of the industry.
Performance of the National Pension Service
In 2022, the NPS experienced a negative accumulated return of -79.6 trillion won ($60.17 billion), resulting in an annualized return of -8.22%. However, this year has been more favorable, with a positive return of 95.2 trillion won ($71.96 billion) so far. The decision to invest in the cryptocurrency sector could be seen as an attempt to offset the losses incurred last year and capitalize on the positive performance of the industry.
Share Your Thoughts
What are your thoughts on the National Pension Service's investment of $20 million in Coinbase shares? Do you believe it is a wise move for a pension fund to enter the cryptocurrency sector? Share your opinions and insights in the comments section below.
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