Bitcoin breaks into Australia’s retirement scene

AMP Ltd, a leading wealth management and pension firm in Australia, has made a bold move to embrace cryptocurrency, allocating $17 million to Bitcoin futures.

This decision positions AMP as one of Australia's first major retirement firms to venture into cryptocurrencies—a notable step in an industry traditionally known to be conservative.

Steve Flegg, a senior portfolio manager at AMP, wrote on LinkedIn, “This year, AMP portfolios took the plunge and made a modest allocation to bitcoin.”

He added, “We generally thought that even though crypto is risky, new, and not fully proven, that it had become too big, and its potential was too great to continue to ignore.”

An AMP spokesperson told Bloomberg that their investments focused on Bitcoin futures. For now, they do not plan to expand their allocation, starting cautiously with a small investment to carefully manage risk before considering further steps.

In simple terms, Bitcoin futures are agreements to buy or sell the cryptocurrency at a set price later, allowing investors to plan ahead even when prices are unpredictable. These investment tools help manage the risks posed by sudden changes in Bitcoin's value. 

Amid the global crypto wave, Australia's pension system has been slow to embrace cryptocurrency. Michelle Bullock, governor of the Reserve Bank of Australia, previously stated, “I don't really see a role for it, certainly in the Australian economy or payments system.” 

Nevertheless, AMP's move acknowledges the rapid evolution of the digital asset space, including innovations like exchange-traded funds (ETFs). ETFs allow investors to gain exposure to Bitcoin without directly buying the asset, offering a more accessible way to invest. 

Anna Shelly, the Chief Investment Officer of AMP, commented via email, “While our super members have benefited from the exposure, we fully appreciate the risk and volatility characteristics of this emerging asset class and will continue to carefully manage our holding, which is a fractional component of a highly diversified asset mix.” 

AMP's foray into Bitcoin highlights its growing recognition among institutional players. If more institutions across various sectors follow suit, this could accelerate the mainstream acceptance of cryptocurrencies.