South Korea's National Pension Service (NPS) announced that it has invested in global cryptocurrency exchange Coinbase and technology firm Microstrategy.
Investments in Coinbase and Microstrategy
According to data requested from the National Pension Service by Baek Jong-heon, a member of the National Assembly Committee on Health and Welfare, NPS invested in shares of Coinbase and Microstrategy. The service denies direct investments in cryptocurrencies. 'Bitcoin and other virtual assets are not investments, and we invested in shares because they are included in the benchmark index,' the National Pensions Service said.
Investment Management Methods
The National Pension Service operates in two ways when it comes to investing in overseas stocks: through index management, which manually tracks the Morgan Stanley Capital International (MSCI) index, and by investing in individual companies through a custodian manager. The Coinbase and Microstrategy shares held by the National Pension Fund were either automatically purchased in line with these indices or acquired through an investment manager. As of March 2024, the National Pension Fund holds 280,000 Coinbase shares (worth approximately $10.9 billion) and 200 MicroStrategy shares (worth approximately $400 million).
Statements and Future Plans
Some market observers have interpreted these investments by the National Pension Service as an indirect investment in cryptocurrencies, particularly bitcoin. However, NPS has denied this claim, stating that it 'did not purchase these companies to invest in cryptocurrencies.' When asked about plans to limit investments in cryptocurrency-related companies, NPS explained that this is a matter for the fund’s management committee, which must approve changes to the benchmark index if necessary. 'The National Pension Service should carefully review its investment policy for cryptocurrencies in light of their volatility and comprehensively manage any risks that may arise,' Baek Jong-heon said.
The announcement by South Korea's National Pension Service about its investments in shares of global companies such as Coinbase and Microstrategy has sparked discussions of indirect investments in cryptocurrencies. However, the service insists that these investments were made for other reasons.
