Cryptocurrencies are still in the zone of interest of US pension funds, despite the crypto winter. While some of them have given up on investing, others see it as a great opportunity.
Depressive market conditions in 2022 have left pension fund managers wondering whether to double their cryptocurrency investments or leave. However, despite bear market losses, some North American pension funds remain optimistic about cryptocurrencies, according to the Wall Street Journal.
A $5 billion pension fund serving Houston firefighters said last October it had invested $25 million in Bitcoin and Ethereum. Since this announcement, both cryptocurrencies have fallen by over 50%, but fund managers understood that cryptocurrency is a very volatile asset class.
“Of course, we would have preferred otherwise,” Houston Firefighters’ Relief and Retirement Fund investment chief Ajit Singh said in an email. But “volatility and large swings are expected.” The Houston firefighters’ fund views its cryptocurrency holdings as a long-term investment and intends to hold them for three to five years. The fund remains interested in cryptocurrencies but is not currently making any additional investments.
Other pension funds see the bear market as an opportunity for further investment. “The yields are more attractive right now given that some people are less willing to do this given the crypto winter that we've endured,” said Katherine Molnar, investment chief of the Fairfax County Police Officers Retirement System.
The Fairfax police fund and its sister fund, the Fairfax County Employees’ Retirement System, have a total of $6.6 billion under management and about 30,000 beneficiaries. They have about 4.5% and 2.5% of assets, respectively, committed to crypto-related holdings, after rapid gains on a 2018 investment, according to the WSJ.
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