The Government Pension Investment Fund of Japan (GPIF), the world's largest pension fund managing more than $1.5 trillion in assets, announced that it will explore diversifying part of its investment portfolio into Bitcoin.
According to the announcement, the PIF will request information on illiquid alternative assets such as Bitcoin, gold, forests and farmland as part of diversification efforts. Although not currently invested in these assets, the move signals that the mega fund is actively seeking options beyond stocks and bonds.
The GPIF said it seeks “fundamental knowledge about target assets to provide information” and wants to understand “how external pension funds integrate them into their investment portfolios”.
As a major supervisor of Japanese pensions, the Japan Public Pension Investment Fund is actively refining the sophistication of its investment strategies. In recent years, it has allocated a more diversified range of assets, including real estate, infrastructure and private equity.
Bitcoin represents the most popular asset being researched. Although risky and volatile, BTC is increasingly seen as an inflation hedge like gold. GPIF stressed that its announcement does not guarantee future investment, however, the implications of Japanese pension funds purchasing Bitcoin will shake the industry.
The exploration comes as Japan passed new laws enabling investment funds to hold bitcoin directly. It signals a broader move toward legalizing Bitcoin within the world's third-largest economy.
The GPIF manages pensions for more than 67 million Japanese citizens. Currently, 97% of its holdings are domestic and foreign bonds and stocks. Diversifying beyond traditional assets would be a big turn-on for such an influential institutional investor.
With over $1.5 trillion at its disposal, even a small amount allocated to Bitcoin by the GPIF could significantly impact prices and increase Bitcoin's legitimacy.
