Evaluation gains and losses over 150 billion KRW from BTC-related stock investments
Direct BTC investment by pension funds is currently practically impossible
Approval of spot ETF is the turning point for institutional BTC investment
As Bitcoin (BTC) continues its record-breaking rally, the National Pension Service (NPS) is also indirectly benefiting. The valuation of BTC-related stocks invested in the U.S. stock market has nearly tripled compared to the initial investment. The unrealized gains exceed 150 billion KRW. This substantial profit from 'indirect investment' is expected to bring renewed attention to the reality in Korea, where institutional BTC investment is blocked.
According to the U.S. Securities and Exchange Commission (SEC) on the 14th, as of the end of Q3, the NPS holds 245,000 shares of MicroStrategy and 265,646 shares of Coinbase. MicroStrategy is known as the company holding the largest amount of BTC, and Coinbase is a U.S.-based cryptocurrency exchange. Both stocks are considered representative BTC-themed stocks. The average purchase prices for NPS are $146.34 and $95.69 respectively. As of the 12th, MicroStrategy’s stock price was $356.59, and Coinbase’s was $319.13. The total principal invested by NPS in these two stocks was $61.27 million, and the valuation has grown to $172.13 million. The unrealized gain amounts to $110.86 million (approximately 156 billion KRW).
Startled by BTC 'Indirect Investment' Criticism... Direct Investment Practically Impossible
According to the SEC, the NPS first invested in Coinbase in Q3 last year and newly added MicroStrategy to its portfolio in Q2 this year. When controversy arose in the National Assembly over whether this constituted BTC 'indirect investment,' the NPS drew a clear line, stating it has no plans to invest in virtual assets. The NPS invests in overseas stocks by tracking the MSCI (Morgan Stanley Capital International) index, and since Coinbase and MicroStrategy were included in the MSCI, they were automatically purchased.
Currently, direct investment in BTC by the NPS is fundamentally impossible. Under the National Pension Act, investment targets are limited to securities and derivatives as defined by the Capital Markets and Financial Investment Business Act, and virtual assets do not fall under either securities or derivatives. The only way for the NPS to invest in BTC at present is to purchase spot exchange-traded funds (ETFs) traded in the U.S. market, as ETFs are treated as securities. However, the NPS has not yet purchased any BTC ETFs in the U.S. Since 2017, Korea has banned financial institutions from holding or investing in virtual assets altogether and continues to delay domestic approval of spot ETFs, reflecting a conservative stance toward virtual assets. Public opinion still largely views virtual assets as speculative, which remains a significant obstacle.
Virtual Asset 'Galapagos' Crossroads? Spot ETF Approval Is Key
Not only the NPS but also other domestic pension funds and mutual aid associations are blocked from BTC investment by law or internal regulations. For example, when reports surfaced three years ago that the Korea Teachers' Pension was considering BTC investment, the organization quickly issued a notice on its website denying the claims, showing a defensive stance. In contrast, overseas pension funds are increasingly investing directly in BTC. This year alone, following the Wisconsin Investment Board and Michigan’s retirement fund, the UK pension specialist Cartwright recently invested 3% of its assets in BTC.
Since Donald Trump, who proclaimed himself the 'President of Virtual Assets' and announced plans to stockpile BTC as a strategic U.S. asset, the status of BTC in global capital markets is expected to rise steadily. According to Binance, the world’s largest cryptocurrency exchange, BTC’s price has surged 134% over the past year. This is an overwhelming return compared to all other assets. As of the 13th, BTC’s market capitalization reached $1.72 trillion (approximately 2,420 trillion KRW). This is on par with silver and has surpassed the combined market capitalization of the KOSPI and KOSDAQ (2,356 trillion KRW as of the 12th). An investment banking (IB) industry insider said, "The fact that globally recognized assets are blocked from investment due to regulations is tantamount to self-imposed 'Galapagos' isolation," adding, "Whether spot ETFs are approved domestically will be a turning point for institutional investors going forward."
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