New Zealand Wealth Manager Invests $244 Million (5%) Of Its Fund In Bitcoin

As Bitcoin (BTC) continues to go mainstream and become increasingly popular among financial experts, New Zealand Fund Management’s KiwiSaver Growth Fund disclosed that it has a significant amount of its capital in the popular cryptocurrency.  

According to a report published today by local news outlet Stuff, the wealth manager’s Chief Investment Officer James Grigor said the fund had been investing in Bitcoin since October 2020, and currently has about 5% of its capital in the asset class.  

As of December 2020, Grigor said the KiwiSaver fund holds NZ$350 million (US$244 million) worth of bitcoin. 

Comparing Bitcoin to traditional financial instrument gold, Grigor said the former has become a commodity in recent times, as investors now adopt it as a hedge against economic woes. 

While the KiwiSaver Growth Fund seemed happy with the investment, rival fund managers have criticized the move, calling Bitcoin a speculative asset, which is similar to gambling. 

Responding to critics, Grigor said: 

“If you are happy to invest in gold, you can’t really discount bitcoin,” adding that he expects the critics to also make similar investments in the next five years. 

Although the fund manager is not planning to liquidate its existing investments in traditional assets, like bonds and shares, it is only investing in Bitcoin to help the firm during a financial crisis. 

Recall that Bitcoin has spiked by more than 1000% since March last year, setting a new all-time high of nearly $62,000 with a market cap above $1 trillion. This feat has continued to lure wealth managers, institutional and corporate investors to BTC, with large funds being committed to the market. 

Early Stages?

Despite the number of wealth managers that have embraced BTC, one would think interest in the assets from the investor class would subside as prices slow down in recent days. 

Contrary to that opinion, Fidelity Investments’ boss recently disclosed that more fund managers and advisors are still learning about Bitcoin and may venture into the market soon.