This article is also available in Spanish.
In a revolutionary move for the Australian superannuation industry, AMP Ltd., a leading superannuation and wealth management company, has decided to assigned approximately 27 million Australian dollars (about $17.2 million) in Bitcoin (BTC) futures.
This investment marks AMP as one of the first major pension managers in Australia to embrace cryptocurrency products, reflecting a shift in attitudes towards digital assets within a traditionally conservative sector.
Investing in AMP Bitcoin futures
AMP Senior Portfolio Manager Steve Flegg announced the decision on LinkedIn, noting that the firm “took the plunge and made a modest allocation to Bitcoin” earlier this year.
A company representative told Bloomberg that the investment was primarily in Bitcoin futures and that there are currently no plans to increase this commitment.
Related reading
The move comes after BTC recently surged the $100,000 barrier for the first time, increasing by more than 40% since Donald Trump’s victory in the US presidential elections in November.
Trump, known for his pro-cryptocurrency stance, has promised to create a more favorable regulatory environment for digital asset businesses, thereby increasing interest in cryptocurrencies, and has proposed the creation of a national Bitcoin reserve.
Despite AMP’s pioneering steps, Australia’s broader superannuation sector, valued at A$4.1 trillion, has shown limited enthusiasm for cryptocurrency investing.
Reserve Bank of Australia governor Michele Bullock said Bitcoin does not play a significant role in the Australian market economy. Additionally, regulators have warned that it is necessary to adopt robust risk management practices when interacting with digital assets.
The Australian superannuation industry has come under scrutiny over various issues, including concerns over valuation in over-the-counter markets, customer service and investment fees.
Recently, many pension products offered by AMP have failed an annual performance test to identify underperformers pension productswith several failures for the second consecutive year.
Cryptocurrency ETFs fuel AMP’s investment strategy
According to Anna Shelley, Chief Investment Officer at AMP, the decision to invest in Bitcoin futures is indicative of “structural changes” occurring in the digital asset landscape.
He highlighted the recent launch of exchange-traded funds (ETFs) in the United States investing directly in Bitcoin and Ethereum (ETH) by major investment managers as a significant development.
“After testing and careful consideration by our investment team and committee, we included a small, risk-controlled position in digital assets through our Dynamic Asset Allocation program in May,” Shelley explained.
Related reading
Exposure to BTC futures constitutes approximately 0.05% of AMP’s total pension assets, demonstrating a cautious but progressive approach to investment in digital assets from the Australian asset manager.
While AMP recognizes the potential benefits of exposure to cryptocurrencies, the company remains acutely aware of the associated risks and volatility. Shelley noted that while pension fund members gained from this exposure, the investment is part of a highly diversified asset mix and will be managed with careful oversight.
At the time of writing, the market-leading cryptocurrency is trading at $99,800, recording a slight decline of 1.1% over 24 hours.
Featured image from DALL-E, chart from TradingView.com