Japan’s Government Pension Investment Fund (GPIF) has announced that it is considering diversifying a portion of its portfolio into Bitcoin.
According to Bitcoin Magazine, the GPIF would be looking at illiquid alternative assets like Bitcoin, Gold, Forests, and farmland as part of its diversification plans.
Although not currently invested in these alternative options, The major fund has shown that it is looking for alternatives to stocks and bonds.
- The GPIF stated it seeks “basic knowledge about the assets targeted for information provision” and wants to understand “how overseas pension funds incorporate them into their portfolios.”
GPIF as a huge stakeholder in Japanese pensions has been experimenting and honing the sophistication of its investment strategies. Recently it has shifted to a more diverse set of assets including real estate, infrastructure, and private equity.
Bitcoin as an alternative portfolio
Of all the alternative assets researched by the GPIF, Bitcoin has the highest profile. Although risky and volatile, Bitcoin is increasingly perceived as a hedge against inflation like gold so is therefore being considered one of the alternatives by the GPIF.
The consideration by the GPIF comes as Japan passed new laws enabling investment funds to hold Bitcoin directly. It indicates a broader move towards legitimizing Bitcoin within the world’s third-largest economy.
The GPIF has an enormous $1.5 trillion at its disposal, even a tiny allocation of that into Bitcoin could significantly affect prices and further legitimize Bitcoin.
What you should know
Japan’s Government Pension Investment Fund (GPIF) is the world’s largest pension fund managing over $1.5 trillion in assets.
The GPIF manages pensions for over 67 million Japanese citizens. currently, 97% of its holdings are domestic and foreign bonds and stocks. Diversification into Bitcoin by such an influential financial body will skyrocket Bitcoin prices and further legitimize it.
