Canada’s big pension funds enter crypto world

by: Dynasty GI2021-11-13
Recent moves by Canada’s two major pension funds have shown a shift by institutional investors towards digital assets.
In October, the pension fund for the province of Ontario’s teachers took part in a US$ 420 million funding round for crypto exchange FTX, just after the Caisse de Depot et Placement of Quebec made a similar investment into crypto lending platform Celsius Network.

The moves are aligned with the recent trend of venture capitalists also significantly increasing their investments in the crypto sector. CoinGecko, a crypto data intelligence service, estimates that the sector’s capitalisation has reached US$ 2.77 trillion against just US$ 191 billion in April 2020.

Some pension funds, especially in the US, are also moving towards adding cryptocurrencies to their investment portfolio, with the Houston firefighters pension fund buying US$ 25 million worth of bitcoin and ether in October.

Some analysts believe that institutions have taken longer than individuals to start engaging with cryptos due to the sector’s perceived volatility. But for Greg Taylor, chief investment officer of Toronto-based wealth manager Purpose Investments, ‘there are various ways to hedge against that volatility now, especially with the emergence of crypto exchange-traded funds.

According to the daily Toronto Globe and Mail, Purpose launched two crypto ETFs earlier this year that allows investors to gain exposure to bitcoin and ether without actually holding the tokens, which Mr. Taylor said attracted the interest of several major global institutions. Of the assets Purpose manages through their crypto ETFs, it estimates about half come from institutional investors.

Eduardo Carvalho, the founder and CEO of Dynasty Global Investments AG, celebrated:
"What we are witnessing in 2021 is the moment in history when cryptos moved from being a fringe concept driven mostly by individuals to become an increasingly important element of the world’s financial system, with major traditional institutions like investment banks and payment systems entering the sector at the same time digital players with deep pockets like Meta and Twitter also develop their cryptocurrency strategies. To put it simply, Blockchain technology and cryptocurrencies have definitely arrived."

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