AMP Makes a Major Move in the Bitcoin Market, Becomes the First Superannuation Fund to Seek Bitcoin Exposure

In a major announcement, Australia's retirement fund AMP announced an investment of $27 million in Bitcoin thereby making a significant move in the asset class.

Australia’s retirement fund, AMP, has announced an investment of $27 million in Bitcoin, making it the first major superannuation fund to seek exposure to the asset class.

As several large funds from the $4 trillion retirement savings industry have decided to give it a pass considering BTC’s volatility, AMP’s move is significant.

However, customers with assets in the fund’s balanced and growth investment options are most likely to have exposure to Bitcoin, according to AMP Chief Investment Officer Anna Shelly.

Shelly justified the investment by stating that $27 million was just 0.05% of its $57 billion in assets under management.

Earlier in May, AMP purchased Bitcoins when BTC was trading in the $60,000-$70,000 range. According to Shelley, the investment was part of a diversification strategy that supported Bitcoin due to its “momentum and sentiment.”

Other major funds have announced they will not be following suit despite AMP’s pioneering investment.

Bitcoin has no place in the Australian economy, according to critics such as Reserve Bank governor Michele Bullock. He also shared concerns regarding Bitcoin’s stability and its lack of yield production stating that it’s unsuitable for retirement funds.

Pension and retirement funds across the world have been seeking exposure to Bitcoin off-lately, especially with the launch of regulated investment products such as spot Bitcoin ETFs.

US states like Florida and Jersey City are already considering this option.

Since the launch earlier this year in January, spot bitcoin ETF demand has shot up to the roof. BlackRock’s iShares Bitcoin Trust ETF (IBIT) has been leading the pack with its assets under management crossing $50 billion.

BlackRock Recommends 1-2% Exposure to Bitcoin

With BlackRock’s IBIT getting massive inquiries, the world’s largest asset manager went to make an official recommendation for seeking exposure to Bitcoin.

As it has become known, BlackRock released a new report recommending a 1-2% allocation to Bitcoin ETFs, marking the first time the firm has provided a specific figure for exposure to the cryptocurrency. This recommendation comes in response to a high volume of client inquiries about how much to allocate to Bitcoin and its associated ETF, IBIT.

The report suggests that a 1-2% Bitcoin exposure could be appropriate for a diversified portfolio. It also offers clients a structured approach to incorporating cryptocurrency into their investments.

Interestingly, the BlackRock report goes on to mention that Bitcoin carries a risk profile comparable to that of the Magnificent Seven companies — Apple, Amazon, Tesla, Nvidia, Meta, Google, and Microsoft. The asset manager justified Bitcoin investments in the wake of rising geopolitical tensions, growing deficits, and the fragmentation of the global financial system, among other factors.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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