AMP Adopts Bitcoin, Making It the First Major Australian Super Fund to Venture into the Cryptocurrency Market

Australia's largest super fund, AMP, has invested $27 million of its portfolio in Bitcoin, making it the first major fund to venture into the cryptocurrency market.

Australia’s largest super fund, AMP, has announced a $27 million investment in Bitcoin, becoming the first major fund to directly enter the cryptocurrency market.

The move by AMP comes despite skepticism from some quarters, including Reserve Bank of Australia (RBA) Governor Michele Bullock, who has expressed doubts about cryptocurrency’s role in the Australian economy.

However, AMP said its dynamic asset allocation process identified Bitcoin’s strong market momentum and sentiment, which were key drivers in the decision to diversify.

According to reports, the investment was made in May, when Bitcoin was trading between $60,000 and $70,000. The allocation represents 0.05% of AMP’s $57 billion in assets, as per AMP chief investment officer Anna Shelley, and fits within a broader diversification strategy.

Bitcoin’s latest rally to $100,000 per coin marks the pivot, as the market bull run was driven by Donald Trump’s re-election and his new administration’s crypto-friendly stance.

Despite the risks involved, the fund has “taken the plunge,” according to Steve Flegg, Senior Portfolio Manager at AMP, who shared the news on LinkedIn. He said cryptocurrency was simply too large to ignore in terms of growth and potential.

Other super funds are considering a range of approaches. AustralianSuper is reportedly focusing on blockchain technology and indirect investments in companies that use it, while confirming that it has no current plans to invest directly in cryptocurrencies.

Meanwhile, Australian Retirement Trust and retail super giant MLC have expressed some interest but are proceeding with caution. According to the AFR report, they do not intend to follow AMP’s lead.

According to Shelley, the current allocation is at the upper limit for this asset class, but the fund will monitor its holdings closely. Those invested in AMP’s balanced and growth options will have the greatest exposure to Bitcoin at the customer level.

Recently, ASIC (Australian Securities and Investments Commission) announced an expansion of its regulatory framework for cryptocurrency. The move is designed to protect consumers while fostering responsible innovation in the crypto sector.