South Korea’s National Pension Service Secures 40% Profit with a $20 Million Investment in Coinbase Shares
South Korea’s National Pension Service (NPS) has made a groundbreaking foray into the world of virtual assets. According to the latest disclosures made to the U.S. Securities and Exchange Commission (SEC), the NPS invested approximately $20 million in Coinbase shares during the third quarter of this year, marking a significant milestone for the pension giant.
The NPS, recognized as South Korea’s largest investment group, acquired a substantial 282,673 shares of Coinbase during Q3, with an evaluated worth of $19.934 million. This strategic move reaped a remarkable profit of around 40% within just one quarter, with the average purchase price of Coinbase shares standing at $70.5.
Coinbase, a major cryptocurrency exchange platform, debuted on the NASDAQ in April 2021 and has since been a frontrunner in the digital assets market. Its performance has shown a strong correlation with the rise in trading volumes of virtual assets, especially as seen in the recent surge of Bitcoin prices, which hit an 18-month high on the 9th of this month.
The decision by the NPS to include a virtual asset-related company like Coinbase in its U.S. stock investment portfolio is a noteworthy deviation from its previous stance. The pension fund had refrained from direct investments in cryptocurrencies, citing volatility and other associated risks as primary concerns. However, this recent move indicates a strategic shift in the investment approach of the NPS.
Notably, this marks the first instance of the National Pension Service stepping into the domain of virtual assets directly. Previously, the NPS faced criticism from the parliament in 2021 when it was revealed that the pension fund indirectly invested in funds related to virtual assets. At that time, the NPS clarified that while it did invest in exchanges, virtual assets themselves were not within the scope of its targeted investments.
The remarkable surge in Bitcoin prices post the NPS’s acquisition of Coinbase shares has resulted in substantial gains for the pension fund. With Coinbase’s closing price at $98.12 per share, the NPS has realized an impressive return of around 40% in just a quarter.
The move by the NPS, a conservative and risk-averse institutional investor, into the realm of cryptocurrency markets indicates a potential shift in global investment perspectives towards digital assets. This strategic leap not only showcases the evolving nature of investment strategies but also highlights the growing mainstream acceptance of cryptocurrencies as viable investment options.
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