South Korea's National Pension Service (NPS) is increasing its indirect exposure to Bitcoin by buying shares of MicroStrategy, the public company with the largest holdings of the cryptocurrency on the market.
In a financial filing with the Securities and Exchange Commission (SEC) for the second quarter of this year, the South Korean pension fund disclosed a significant investment in MicroStrategy shares, MSTR, worth $33,7 million.
According to experts, the investment made by the South Korean National Pension Service in MicroStrategy not only diversifies its portfolio but also establishes an indirect link with the Bitcoin market, which is currently the most capitalized and prominent cryptocurrency in the digital ecosystem.
MicroStrategy provides indirect exposure to Bitcoin
According to the presentation, South Korea's National Pension Service has an investment of almost $80 million in shares of companies directly linked to Bitcoin.
In total, the state fund bought 24.500 shares of MicroStrategy, before the US business intelligence company announced its 10:1 stock split in early August. Following this move, The total number of MSTR shares held by the NPS reached 245.000, which represents a total value of approximately $33,7 million, considering the last close of the company's shares. But, in addition to MSTR, the National Pension Service of South Korea also has invested around $45 million in Coinbase (COIN) shares.
The NPS fund is positioned as the third-largest pension fund in the world by assets, so its current holdings in MicroStrategy shares, known for its heavy investment in Bitcoin, represent an important milestone for the market's leading cryptocurrency. As experts have explained, MicroStrategy is considered an intermediary for indirect exposure to Bitcoin.
These investments are part of a broader strategy by NPS to increase its exposure to digital assets. They also reflect a shift in perception of digital assets in the institutional investment space and the desire of NPS to capitalize on the growth of cryptocurrencies.
South Koreans Own Bitcoin Indirectly
The NPS's purchase of MicroStrategy and Coinbase shares also provides fund beneficiaries with indirect exposure to Bitcoin.
As mentioned, MicroStrategy is recognized as the largest corporate holder of Bitcoin, with a total of 226.500 BTC on its corporate balance sheet. This amount of bitcoins is valued at around $13.500 billion USD, according to the BTC price on the market. Because of this, MicroStrategy is considered a middleman for investors seeking exposure to the cryptocurrency market without having to buy Bitcoin directly.
NPS beneficiaries, which include millions of South Korean workers, now have a link to Bitcoin’s performance through MicroStrategy shares. This investment is relevant, considering the growing interest that investors have in cryptocurrencies, and the need for pension funds to diversify their investments to offer better returns to their members and meet their demands in the market. Thus, the NPS aligns with the global trend of pension funds seeking to take advantage of the growth potential of cryptocurrencies and digital assets.
Pension fund managers increase their positions in cryptocurrencies
The NPS move is part of a broader trend among pension funds and other institutional investors increasing their positions in cryptocurrencies.
As the cryptocurrency market continues to mature, more state funds are considering including digital assets in their portfolios, which could have significant implications for the future of the crypto market. Thus, as more institutions continue to enter the cryptocurrency space, demand could increase, which in turn could influence the price and stability of the market at large.
The NPS’s recent acquisition of MicroStrategy shares not only represents a strategic investment, but also underscores a shift in the way pension funds are approaching cryptocurrencies to diversify their investments and capitalize on the growth of digital assets.
