Pension funds are among the world’s largest institutional investors, and in recent years they have started investing in crypto. Pension funds typically invest in crypto through regulated vehicles such as spot bitcoin ETFs, digital asset investment funds, and crypto-related public companies. Because pension funds manage retirement assets and have strict fiduciary responsibilities, they typically use conservative, diversified approaches when gaining exposure to digital assets.
In this article, we'll cover the methods and motivations behind these institutional crypto allocations.
What Is a Pension Fund?
A pension fund is a pool of capital that manages retirement savings on behalf of current and future retirees. It operates under a duty to protect beneficiary assets and is invested across a long time horizon, often measured in decades. That longer timeline, and the strict legal duty owed to retirees, is the lens through which these firms evaluate any new asset class. In other words, they are typically among the more conservative market participants.
Pension funds come in three broad varieties:
