According to local reports, Fidelity, a massive $4.8 trillion asset manager, spilled the beans: pension funds are eyeing Bitcoin and other cryptocurrencies! It signifies that traditional finance companies are warming up to digital assets. BlackRock’s Digital Assets Head says sovereign wealth funds and others are exploring a dollar industry with Bitcoin ETFs. With over $10 trillion, the US pension funds are leading the charge. 

High-Net-Worth vs. Pension Plans

On this, Manuel Nordeste, Vice President at Fidelity Digital Assets, highlighted that while pension funds are in the early stages of discussing crypto assets with their investment committees, family offices, and high-net-worth individuals are already interested in crypto investments.

Historically, when Fidelity Digital Assets started in 2018, it initially attracted family offices, small specialized asset managers, and hedge funds, before gradually attracting larger institutional investors and corporates. However, while 80% of high-net-worth individuals view digital assets positively, only 23% of pension plans share this sentiment. Moreover, while nearly half of high-net-worth individuals have invested in digital assets, only 7% of pension plans have done so.

Fidelity Sees $4.7 Trillion Opportunity

Nordeste highlighted that smaller firms, such as family offices, often exhibit more agility and a willingness to take risks compared to pension plans, which tend to follow more conservative investment strategies. However, with the introduction of regulated products like spot Bitcoin ETFs, pension funds are gradually warming up to the idea of incorporating crypto assets into their portfolios.

Notably, the US SEC’s approval of spot Bitcoin ETFs in January has prompted expectations that institutions, including pension funds, will begin trading in the Bitcoin spot market through these regulated products. Interestingly, both BlackRock and Fidelity offer spot Bitcoin ETFs, providing pension funds with a familiar and accessible entry point into the crypto market.

Recent 13F filings confirm major pension consultants’ investments in these ETFs, suggesting a growing acceptance and serious consideration of Bitcoin among conservative investment vehicles like pension funds.

Would you be happy if your pension fund started investing in crypto? Tell us your thoughts!

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