County, state, and national pension plans are significant players on the institutional investor stage, and many aren’t afraid to embrace alternative assets, such as private equity.
However, it could take a while for pension plans to warm to bitcoin, and much of that delay appears to revolve around price. A recent survey by Nickel Digital Asset Management — Europe’s largest regulated digital assets hedge fund manager — indicates that 42% of the pension managers surveyed want to see bitcoin traverse $100,000 before allocating to the largest digital currency.
Nickel Digital “interviewed 200 professional investors from across seven countries who collectively manage around $329 billion in assets and found 13% say Bitcoin needs to consistently reach $50,000 for pension funds to face pressure, and 28% believe the figure is above $75,000. Just 3% believe pension scheme allocation to digital assets is not dependent on what price Bitcoin reaches,” according to the firm.
A further 15% of pension managers want to see bitcoin get to $200,000 before getting involved. In other words, 57% of the pension bosses polled by Nickel Digital want to see the cryptocurrency more than double or surge five-fold from current levels. Assuming those gains materialize, investors in bitcoin itself or funds such as the Grayscale Bitcoin Trust (GBTC) could benefit in dramatic fashion.
On the pension/bitcoin front there is some good news: The interest is there.
“According to Nickel’s research, over the next two years 71% of professional investors believe the level of advice and education pension trustees and other professionals running pension schemes will want around crypto and digital assets will increase – 26% expect demand for this to rise dramatically. Only 9% anticipate the level of demand for advice for pension scheme professionals around crypto and digital assets to fall, and 20% anticipate no change,” says the U.K.-based firm.
Two-thirds of those polled by Nickel Digital expect the level of crypto-related advice geared toward pensions to dramatically or slightly increase over the next two years. One reason that pension investors are taking a wait-and-see approach to crypto could be the fact that the universe is rapidly expanding and evolving.
“Bitcoin is by far the largest crypto asset, so many investors use this as benchmark for the wider digital asset sector. However, this is changing as new digital assets are launched and existing ones continue to develop,” says Henry Howell, head of business development at Nickel Digital.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.