Charles Emond, the Chief Executive Officer of Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), has indicated that the company’s investment in Celsius Network is now considered lost, accounting for 200 million Canadian dollars.
Emond made the revelation while addressing reporters about the company’s financial performance, noting amongst many other reasons that the writing off of the investment, pegged at $150 million, is to stay prudent with its expectations.
“It’s an investment that I consider written off because we always have a cautious bias in our valuations,” Emond says, adding that CDPQ is exploring its legal options for the recovery.
The capital injection into Celsius Network was well applauded at the time, with proponents celebrating the entry of institutional investment into the crypto ecosystem. While he acknowledged regret over the investment, Emond said there was a broad-based consultation before the final decision to inject the funds into the now-bankrupt crypto lender was made.
While not apportioning blame, Emond said he believes the firm made its entry into the crypto industry “too soon in a sector in transition, with a company that had to manage extremely rapid growth, even a growth crisis.”
Despite the situation, Emond said the firm is now looking forward.
“No one at the Caisse, myself included, is happy with the outcome of this file,” regrets Emond. “That said, we must not lose sight of the fact that this is an exception in our venture capital portfolio.”
With an estimated deficit of net liabilities loss of $2.8 billion, Celsius Network is considered one of the most indebted bankrupt cryptocurrency lending platforms.
The startup, led by Alex Mashinsky, was the first to halt withdrawals on its platform far back in June, and without a bailout from at least one of its potential investors, including Goldman Sachs and Ripple Labs Inc, the bulk of the company’s creditors may be forced to take up some losses at the end of the day.
Charles Emond, the Chief Executive Officer of Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), has indicated that the company’s investment in Celsius Network is now considered lost.
Emond made the revelation while addressing reporters about the company’s financial performance, noting amongst many other reasons that the writing off of the investment, pegged at $150 million, is to stay prudent with its expectations.
“It’s an investment that I consider written off because we always have a cautious bias in our valuations,” Emond says, adding that CDPQ is exploring its legal options for the recovery.
The capital injection into Celsius Network was well applauded at the time, with proponents celebrating the entry of institutional investment into the crypto ecosystem. While he acknowledged regret over the investment, Emond said there was a broad-based consultation before the final decision to inject the funds into the now-bankrupt crypto lender was made.
While not apportioning blame, Emond said he believes the firm made its entry into the crypto industry “too soon in a sector in transition, with a company that had to manage extremely rapid growth, even a growth crisis.”
Despite the situation, Emond said the firm is now looking forward.
“No one at the Caisse, myself included, is happy with the outcome of this file,” regrets Emond. “That said, we must not lose sight of the fact that this is an exception in our venture capital portfolio.”
With an estimated deficit of net liabilities loss of $2.8 billion, Celsius Network is considered one of the most indebted bankrupt cryptocurrency lending platforms.
The startup, led by Alex Mashinsky, was the first to halt withdrawals on its platform far back in June, and without a bailout from at least one of its potential investors, including Goldman Sachs and Ripple Labs Inc, the bulk of the company’s creditors may be forced to take up some losses at the end of the day.
Pension funds that have bet on the cryptocurrency market over recent years face difficulties navigating the ongoing crash associated with digital assets.
Caisse de dépot et placement du Québec, Canada’s second-largest pension fund, invested $150 million in Celsius Network LLC last October. In July, the crypto lending platform, Celsius, filed for bankruptcy protection because of “extreme market conditions” that prompted a wider selloff.
The Houston Firefighters’ Relief and Retirement Fund bought $25 million worth of Bitcoin and Ether in October last year. Since the announcement, both cryptocurrencies have dropped by more than 50%.
“Of course, we would have preferred otherwise. But volatility and large swings are expected, “said Ajit Singh, the investment chief at Houston Firefighters’ Relief and Retirement Fund investment.
Over the previous two decades, public pension funds have increasingly invested in less-traditional assets in response to low fixed-income.
The recent capital market crash has been painful for investors, especially those who have recently retired or are planning to do so in the next year or two.
The Market Meltdown
Several pension funds and sovereign wealth funds (SWFs) have already invested indirectly in crypto assets through stocks such as Tesla, MicroStrategy, and Coinbase.
California Public Employees’ Retirement System (CalPERS), California’s $441 billion public pension fund, increased the number of its shares in Riot Blockchain, a publicly traded Bitcoin mining firm, in February last year.
In April, a major U.S. asset manager Fidelity Investments in April allowed firms to include Bitcoin investments in their employee 401(k) defined-contribution benefit plans.
Over the two months, important events happened. The global crypto market cap dropped below USD 1 trillion (USD 3 trillion at its peak in October 2021), and the values of cryptocurrencies plunged around 70%.
The plunged values of crypto coins have taken a steep toll on many lending firms and investment funds that deal with those volatile assets. The dreadful incident heightened the risklosings of trust in the indu, creatingeate a downward spiral.
Since the U.S. Federal Reserve and other central banks moved to tighten monetary policy, money has flowed back from digital assets. Bitcoin has lost more than 60% of its value since the end of last year.
Such losses have driven many crypto lenders into bankruptcy or forced them to take drastic steps like freezing withdrawals.
Decentralized finance platforms promising big returns have also suffered heavy losses on some investments, with some hurt by the terra crash.
Pension funds that have bet on the cryptocurrency market over recent years face difficulties navigating the ongoing crash associated with digital assets.
Caisse de dépot et placement du Québec, Canada’s second-largest pension fund, invested $150 million in Celsius Network LLC last October. In July, the crypto lending platform, Celsius, filed for bankruptcy protection because of “extreme market conditions” that prompted a wider selloff.
The Houston Firefighters’ Relief and Retirement Fund bought $25 million worth of Bitcoin and Ether in October last year. Since the announcement, both cryptocurrencies have dropped by more than 50%.
“Of course, we would have preferred otherwise. But volatility and large swings are expected, “said Ajit Singh, the investment chief at Houston Firefighters’ Relief and Retirement Fund investment.
Over the previous two decades, public pension funds have increasingly invested in less-traditional assets in response to low fixed-income.
The recent capital market crash has been painful for investors, especially those who have recently retired or are planning to do so in the next year or two.
The Market Meltdown
Several pension funds and sovereign wealth funds (SWFs) have already invested indirectly in crypto assets through stocks such as Tesla, MicroStrategy, and Coinbase.
California Public Employees’ Retirement System (CalPERS), California’s $441 billion public pension fund, increased the number of its shares in Riot Blockchain, a publicly traded Bitcoin mining firm, in February last year.
In April, a major U.S. asset manager Fidelity Investments in April allowed firms to include Bitcoin investments in their employee 401(k) defined-contribution benefit plans.
Over the two months, important events happened. The global crypto market cap dropped below USD 1 trillion (USD 3 trillion at its peak in October 2021), and the values of cryptocurrencies plunged around 70%.
The plunged values of crypto coins have taken a steep toll on many lending firms and investment funds that deal with those volatile assets. The dreadful incident heightened the risklosings of trust in the indu, creatingeate a downward spiral.
Since the U.S. Federal Reserve and other central banks moved to tighten monetary policy, money has flowed back from digital assets. Bitcoin has lost more than 60% of its value since the end of last year.
Such losses have driven many crypto lenders into bankruptcy or forced them to take drastic steps like freezing withdrawals.
Decentralized finance platforms promising big returns have also suffered heavy losses on some investments, with some hurt by the terra crash.
Blockchain.News recently had a conversation with Mr. Vincent Chok, the CEO of Hong Kong-based First Digital Trust, a technology-driven financial institution powering the digital asset industry, to help explore whether the cryptocurrency can be considered a viable addition to pension funds.
Bitcoin as Game Changer against inflation for retirement
The global economic crisis is taking a toll on some of the major pension funds around the globe. They are either struggling to make payments for the monthly stipends, as agreed or having little funds to sustain a robust pay scheme.
Speaking to Mr. Chok in an exclusive interview, Chok told Blockchain.News that the issue of inflation has eroded the harvest of retired workers:
“In many countries, inflation is higher than what a pension will yield, where you’re earning 1-2%. It is better to invest in alternative assets in a diverse way, where you can buy property, Bitcoin, and access more. Pensions are long-term, and inflation hits hard-earned money, eating away at the value of money.”
Many users are tired of the traditional pension plans in many countries due to bureaucracy and many processes associated with accessing such funds. This has led to more agitation for a better alternative. Many employees are now looking to use cryptos like Bitcoin to save up for their retirement.
Pension funds in most countries are significantly underfunded, which has led many to attempt to make up the shortfall between plan assets and obligations through investments. This illustrates the potential adoption of digital assets if more pension funds continue to add exposure.
While this is a move from the status quo, many global pension funds appear not to be in a hurry to explore this option.
Growing Interest in Alternative Finance
Yet, several pension funds are looking for a change in the exploratory stage. Interest in investing in Bitcoin is growing in the industry. Firms are working to make it more accessible, as studies indicate that small allocations into crypto can yield favourable results.
In a comprehensive survey of almost 800 institutional investors across Europe and the US, 36% of respondents said that they are currently invested in digital assets, while 6 out of 10 believe digital assets have a place in their investment portfolio. Bitcoin continues to be the preferred digital asset with more than 25% of respondents holding the cryptocurrency.
A significant number of pension firms are increasingly investing in cryptocurrencies.
Bitcoin investment by Houston Pension Fund proved that cryptocurrency is not just appealing to individual investors. In October last year, the Houston Firefighters’ Relief and Retirement Fund (HFRRF) made a $25 million investment in Bitcoin and Ether, marking major news that a U.S. pension fund had put crypto directly on its balance sheet. Of course, $25 million was only a drop in the bucket compared to the $5.5 billion in total assets held by the fund – more precisely, representing just 0.5% of its portfolio.
The U.S. pension investment trend appears contagious as there is rising institutional demand from banks, hedge funds, private companies and even family offices in Europe and the rest of the world.
According to Chok, there is greater interest in and adoption of digital assets as a new investable asset class. The executive said there’s a lot of interest from companies to set up pension plans for employees, plus a lot of interest from banks to include digital assets and crypto into digital pensions.
Mr. Chok suggested that pension funds are often forgotten about but are an investment plan that everyone must have, usually by law. Governments force people to set up their pension accounts, put their money in, and then forget about it. Yields and returns of these investments aren’t lucrative.
“Bitcoin pension plans are for younger generations of people who can make tiny contributions that empower them to have far more diverse portfolios,” he said.
The Bitcoin retirement pensions not only help to provide education but also offer new opportunities than a mere 1-2% yield offered by government pension plans, Mr. Chok explained.
“We see this having the biggest impact on younger generations, who will start to think about their future, their retirement, through the easy accessibility of wealth generation mechanisms,” Mr. Chok stated.
The Bitcoin pension plan gives more hope that younger generations can set themselves up for the future while enabling them to learn about diversifying portfolios and various wealth channels that are accessible and which young people can participate in, he elaborated.
“Pensions are a boring topic as people aren’t talking about this at dinner. But these new programs – The bitcoin pension plan – enable people to be more willing to learn and provide greater awareness of access to capital, and greater financial inclusion. We’re proud to be able to offer and educate people on new opportunities for wealth generation,” Mr. Chok told Blockchain.News.
Risks Involved
Yet, Mr. Chok acknowledged that such enormous achievements and benefits offered do come with shortcomings. For instance, since Bitcoin is speculative and highly volatile in its current state, some entities and individuals believe its long-term investment case is weak.
In March, the Department of Labor, raised serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptos. The department, which regulates 401(k) plans, cautioned retirement plan managers to be judicious when it comes to cryptocurrencies.
However, The Internal Revenue Code (Code) and the Employee Retirement Income Security Act of 1974 (ERISA) do not explicitly prohibit the use of crypto as a 401(k)-investment option.
Mr. Chok told Blockchain.News that in July last year, BnkToTheFuture.com, the largest online investment community of professional investors investing in blockchain, fintech and Bitcoin companies, launched a retirement for investors seeking to incorporate crypto as part of their retirement portfolio and inheritance planning.
Despites its volatility, Bitcoin is also attracting attention from institutional investors. More large US pension funds are beginning to consider the unregulated asset as a potential asset class. The announcement by Fidelity Investments, the nation’s largest provider of 401(k) retirement plans, about launching Bitcoin as an investment option, raised significant curiosity among market participants.
The global Fidelity Investment is another major large retirement services platform that has started offering a Bitcoin 401(k) product. By this, the company is providing employees with a saving for retirement opportunity to add up to 20% of their pension balance to Bitcoin.
Despite the risks, at least one major employer – MicroStrategy business and software services company – has signed up to offer Fidelity’s new product to its employees.
In June last year, a small 401(k) provider called ForUsAll started allowing consumers to allocate up to 5% of their retirement funds into cryptocurrency.
Of course, the potential for significant wealth accumulation is the primary benefit of investing in cryptocurrency, plus there are other benefits.
Retirement plan sponsors are looking to provide the service based on customers’ demand. Offering cryptocurrency under a 401(k) plan would also relieve employees of the burden and headaches of holding and trading cryptos for themselves.
Empirical data shows that crypto components have the ability to significantly increase the yield of a pension fund portfolio, though such enhancement of yield comes at slightly higher risk levels.
According to Mr. Chok, “It’s not about putting 100% of your retirement fund into digital assets. It simply has a balanced portfolio. If you have 5% in crypto for example, a non-inflationary asset, and it appreciates over 30%, this will still have a huge impact on a portfolio without putting a dent on it if something were to happen to your chosen asset. So, the potential for upside is significant.”
“If you lost everything, it’s 5%. it won’t hurt your portfolio. You still have an account comparable to standardized government pensions.”
The executive said that the increase in risk can be mitigated by adding an actively managed crypto-component to the portfolio rather than a passive investment product.
Crypto Retirement Portfolio Outlook
Bitcoin is certainly an alluring investment opportunity because of the potential to make substantial profits. Nothing explicitly prohibits plan fiduciaries from offering the crypto under a retirement plan.
Employees and retirees can invest in Bitcoin through their IRAs as there is no legal prohibition against doing so. However, such employees and retirees should evaluate the risks and obtain professional advice through their preferred trading platforms while making such investments.
Lendable.co.uk, a major AI-powered consumer finance platform based in London, announced on Thursday it raised £210 million in a funding round led by the Ontario Teachers’ Pension Plan Board through its Teachers’ Innovation Platform (TIP).
That is not the first time Canada’s pension organization invested in startups. In October last year, the Ontario Teachers’ Pension Plan and its Teachers’ Innovation Platform led a funding round in which the FTX crypto exchange obtained $420 million from various investors.
Teacher’s Innovation Platform (TIP) is a new investment department within Ontario Teachers’ Pension Plan (a pension fund company) and focuses on late-stage venture and growth equity in cutting-edge technology firms.
In the press release issued by Lendable, the company said that it plans to use the fresh funding to develop new products and to enable its expansion in new markets.
Martin Kissinger, founder and CEO of Lendable.co.uk, talked about the financing and said: “We are excited to partner with TIP as we accelerate our expansion across products and markets. Our DNA from day one has been to bring transparency and fairness to consumer finance, and we are proud of the fantastic feedback we consistently receive from our customers. TIP is a global growth investor with a long-term view who can support our ambition to make this giant market work better.”
Meanwhile, Olivia Steedman, Senior Managing Director at TIP, also commented about the development and stated: “Lendable’s seamless, quick and easy to use products, powered by advanced AI, are shaping the future of consumer finance. We’re delighted to work with Martin and his visionary team to deliver on Lendable’s growth ambitions.”
Providing Loans to Businesses
Founded in 2014 by Martin Kissinger and Victoria van Lennep, Lendable.co.uk is on a mission to use technology to make consumer finance work better for thousands of millions of customers. It applies automation and AI to enhance underwriting and offer customers better rates, transparency and service. The platform provides debt asset classes to fintech companies such as banks family offices, among others across the world, to offer credit facilities and financial services to their customers.
Lendable has proven popular with customers because it comes straight from an investor when clients borrow money from the lending platform. Unlike banks that hand out loans from a large amount of money, they look after on behalf of savers. Its platform is super-fast and makes lending as hassle-free as possible. The platform uses institutional capital to fund its services, according to the company. Within a matter of a few clicks, a customer gets her quote. Unlike banks that require paperwork and run expensive branch networks.
Last March, Lendable achieved unicorn status after it obtained backing from Goldman Sachs, a multinational investment bank. With plans to expand its business into the US marketplace, the lending platform is reported to be launching a new credit card product.
According to the announcement revealed by the Korea Economic Daily, the Korea Teacher’s Credit Union (KTCU), the second-largest institutional investor in South Korea, is planning to invest in Bitcoin as part of its balance sheet.
The public pension fund would not purchase Bitcoin directly but get exposure to it via investment products like Bitcoin ETFs.
The KTCU is seeking to invest in a Bitcoin Exchange Traded-Fund when the first Korea-based firm launches a Bitcoin ETF in the first half of 2022. Of course, the Mirae Asset Global investment is preparing to launch BetaPro Inverse Bitcoin ETF at any time next year.
The Korea Teacher’s Credit Union is set to become the first pension fund in South Korea to invest in Bitcoin. However, the amount of funds to be invested and the exact time of launch still remains unclear.
A KTCU official talked about the development and stated that the institution plans to consult with local asset management firms before reaching a decision concerning asset allocation.
“As there are some well-made cryptocurrency-linked ETF products by asset managers such as Korea’s Mirae Asset Global Investments, we plan to invest in the ETF products after consultation with domestic asset managers,” the KTCU spokesperson said.
The KTCU is the first pension fund with $40.2 billion in assets under management in South Korea.
At the current moment, the pension fund has allocated 40% of its investments in alternative assets, 9% in international stocks and 10% in domestic. The KTCU will also use the overseas stock accounts for investing in the bitcoin-related ETF assets, the Korea Economic Daily stated.
Crypto Has A Place in Pension Scheme Portfolio
The decision by The Korea Teacher’s Credit Union comes at a time when crypto’s widespread adoption across the world is significantly rising, particularly among pension funds.
Bitcoin has experienced massive growth in the last year, significantly outpacing the S&P 500. Several experts state that the reason for such growth is contributed by lower stock market returns in the near term, fears of inflation, and investors looking for higher yields from alternative investments.
Bitcoin is increasingly becoming a larger part of several institutional portfolios, including pension funds.
Recently as reported by Blockchain.News in February, the California Public Employee Retirement System (CalPERS), the U.S.’s largest public pension system, revealed that it increased its investment in RIOT Blockchain Inc, a publicly-traded bitcoin mining company, from $49,000 in 2017 to $1.6 million in 2020.
Pension funds such as CalPERS normally have been searching for higher investment yields by investing in private equity. However, in recent years, returns from private equity have underperformed in comparison to the S&P.
As a result, institutional investors have been showing increasing interest in even riskier assets that may produce higher yields. This search has led public pension institutions such as Virginia’s Fairfax County employee and Police Officer’s Retirement Systems and the University of Michigan’s Pension to announce plans to invest in Bitcoin and other crypto-assets.
Last week, Houston’s Firefighters Relief and Retirement Fund in the U.S. invested an undisclosed amount of its funds in Bitcoin through institutional Bitcoin services provider NYDIG.
A few days ago, the crypto space got its long-awaited ETF products, and two U.S. Bitcoin backed ETFs have already launched, thus bringing further acceptance of cryptocurrencies.
With the success of the ProShares Bitcoin Strategy EFT, which garnered more than $1 billion in assets in just two days, chances are higher for the queue of other firms hoping to enter into the sector.
The Valkyrie Bitcoin Strategy ETF started trading on the Nasdaq stock exchange on Friday last week, with 3.1 million shares changed hands during that day alone.
All these demonstrate great interest among investors looking to invest in Bitcoin and other cryptocurrencies.
Houston Firefighter’s Pension Fund has stated that it made some significant investment into the crypto space, another sign that retirement investments are taking crypto assets seriously despite regulatory concerns.
The Houston Firefighters’ Relief and Retirement Fund announced on Thursday, October 21, that it bought $25 million worth of Bitcoin and Ethereum through the assistance of NYDIG (New York Digital Investment Group).
The fund, which has $5.5 billion in assets under management, stated that it has been managing the investment for several years now.
Ajit Singh, the chief investment officer at Houston firefighter’s pension fund, talked about the development and expressed belief in the disruptive potential of cryptocurrencies. He said: “We have been studying this as an asset class to add to our investment portfolio for quite some time. It became an asset class we could not ignore anymore.”
Singh showed his confidence that the cryptocurrency investment will pay off, stating that: “I see this as another tool to manage my risk. It has a positive expected return and it manages my risk. It has a low correlation to every other asset class.”
Singh stated that they preferred investing in direct tokens, and that explains the reason why Houston firefighter’s pension fund invested in actual cryptocurrencies, instead of taking on risks associated with futures-related investments.
“We didn’t want to get the synthetic exposure. We decided to go directly to the token. As more and more institutional adoptions happen, there will be more and more dynamics that develop for supply and demand. And having physical assets — actual tokens — gives us in the future the possibility of income generation potential,”
Houston firefighter’s pension fund is responsible for managing the benefits of more than 6,600 active and retired firefighters as well as survivors of firefighters.
According to the group, more than half of the fund is invested in common and private equity, but also includes real estate, domestic stocks, cash, bonds, and international stocks.
Retirement Funds See Interest
According to the National Association of State Retirement Administrators, public pension funds oversee about $5.5 trillion worth of assets.
The Houston firefighters pension fund is not the first to enter into the cryptocurrencies, two pension funds in Virginia State purchased crypto investments some two years ago and recently mentioned they are planning to expand their investments by another $50 million.
As reported by Blockchain.News in February 2021, California Public Employees’ Retirement System (CalPERS), the largest U.S. public pension fund, increased its stakes in RIOT blockchain, a Bitcoin mining firm. The California-based public pension fund, worth nearly $450 billion, first purchased 16,907 RIOT shares during Bitcoin’s 2017 bull run.
In June, retirement plan provider ForUsAll offered an option to its clients to invest up to 5% of their portfolio assets in cryptocurrencies, stating the US citizens could be disadvantaged if they are not given the option of accessing cryptocurrencies in their retirement plans.
Grayscale Investments also stated this year that it has witnessed a rising number of pension funds and endowments actively investing their funds to get exposure to cryptocurrencies.
The pension fund for firefighters in Houston has allocated part of its $4 billion portfolio towards crypto.
According to a Thursday Bloomberg report, the Houston Firefighters’ Relief and Retirement Fund used the New York Digital Investment Group, or NYDIG, to execute the purchase of $25 million in Bitcoin (BTC) and Ether (ETH). Public records through the Texas comptroller’s office show the pension fund held more than $4.1 billion in total net assets as of June 2020, meaning the group has allocated roughly 0.6% of its portfolio towards digital assets.
“We have been studying this as an asset class to add to our investment portfolio for quite some time,” said the fund’s chief investment officer Ajit Singh. “It became an asset class we could not ignore anymore.”
He added:
“As more and more institutional adoptions happen, there will be more and more dynamics that develop for supply and demand. And having physical assets — actual tokens — gives us in the future the possibility of income generation potential.”
The fund is responsible for the benefits of more than 6,600 active and retired firefighters as well as surviving family members. According to the group, more than half of the fund is invested in common and private equity but also includes domestic stocks, international stocks, bonds, cash and real estate.
Related:Crypto and pension funds: Like oil and water, or maybe not?
In June, retirement plan provider ForUsAll gave its clients the option to invest up to 5% of their portfolio assets in cryptocurrencies, saying United States citizens could be at a “disadvantage” if they are not given the option of accessing crypto assets in their retirement plans. Earlier this year, Grayscale also reported that it had seen pension funds and endowments investing actively into its funds with exposure to crypto.
United States-based retirement plan provider, ForUsAll, is joining forces with Coinbase to allow clients to invest up to 5% of their portfolio assets in cryptocurrencies.
The pension provider, which primarily serves small-to-medium-sized businesses, is working to offer exposure to more than 50 cryptocurrencies in a product called Alt 401(k).
The firm’s co-founder and chief investment officer, David Ramirez, acknowledged concerns regarding offering crypto products in pension portfolios due to their volatility, but argued that U.S. citizens will be at a “disadvantage” if they are not given the option of accessing crypto assets in their retirement plans:
“The average American may be at a structural disadvantage relative to large institutions and high net worth individuals, and we just don’t think that’s right.”
ForUsAll handles $1.7 billion in retirement plan assets, which accounts for a small portion of the $22 trillion retirement-account markets.
In the United States, a 401 plan is an employer-sponsored defined-contribution pension account defined in subsection 401 of the Internal Revenue Code.
Larger institutional investment firms such as Fidelity Investments and Charles Schwab do not allow customers to directly buy or sell cryptocurrency in taxable accounts or individual retirement accounts. However, they can purchase shares in trusts that do invest in crypto assets from companies such as Grayscale Investments.
Related:Fidelity’s Tom Jessop says crypto has hit a ‘tipping point’
One firm that does allow the direct purchase of crypto assets and gold for retirement plans is BitcoinIRA, which was founded in 2016. Commenting on ForUsAll’s collaboration with Coinbase, co-founder and chief operating officer at BitcoinIRA, Chris Kline, stated:
“ForUsAll and Coinbase wouldn’t be doing this if there wasn’t a market. There are people that want this with these types of funds. And they want to have access to new and exciting things with their 401(k)s.”
MicroStrategy CEO Michael Saylor responded to ForUsAll’s move to embrace crypto.
If you invest 5% of your portfolio in #bitcoin, you have made the decision to invest 95% of your portfolio in assets getting demonetized by bitcoin.
— Michael Saylor (@michael_saylor) June 14, 2021
In April, Cointelegraph reported that pension funds and insurance firms have been increasingly dedicating part of their asset bases to Bitcoin and crypto assets as concerns over inflation escalated amid the coronavirus pandemic.
In May 2020, Kingdom Trust, a regulated custodian managing over $13 billion in assets, launched a retirement account supporting both Bitcoin and legacy assets.
The firm noted that when the Internal Revenue Service decided to tax Bitcoin, it directly enabled the asset to be held by qualified custodians and in retirement accounts.
