South Korea's National Pension Service Considers Direct Bitcoin Investment

South Korea's National Pension Service (NPS), which oversees more than $800 billion in assets, is contemplating direct investments in Bitcoin. This potential move is driven by recent legislative changes that now allow national pension funds to invest in cryptocurrencies, as well as support from political leaders.

Both major political parties in South Korea have expressed interest in incorporating digital assets into public investment strategies. The Democratic Party leader, Lee Jae-myung, has promised to approve spot Bitcoin ETFs if elected, with the goal of creating a secure investment environment for younger generations.

Currently, the NPS has indirect exposure to cryptocurrencies through its investments in companies like MicroStrategy and Coinbase. In 2024, the NPS acquired $34 million worth of MicroStrategy shares, a company known for its substantial Bitcoin holdings. Additionally, the NPS invested over $45 million in Coinbase shares, demonstrating a growing institutional interest in the crypto sector.

The shift towards direct Bitcoin investment is also influenced by the increasing interest in cryptocurrencies among South Koreans, including older demographics. A recent survey indicated that 11% of crypto investors in South Korea are in their 60s, surpassing the 8% in their 50s, highlighting a broader acceptance of digital assets across age groups.

While the NPS has not yet made direct Bitcoin purchases, the combination of legislative support, political backing, and shifting investor demographics suggests a significant step towards integrating cryptocurrencies into South Korea's national pension investment portfolio. This move could set a precedent for other pension funds globally, potentially leading to increased institutional investment in Bitcoin and other digital assets.