Korean Teachers’ Credit Union, Manager of $47 Billion, Denies Rumours of Bitcoin Investment

Korean Teachers’ Credit Union (KTCU) issued a statement quashing rumors of its interest in Bitcoin ETF

By
Chung Yee
on
October 28, 2021
Category:
Breaking News

Risk-Averse

The Korean Teachers’ Credit Union (KTCU) issued a statement denying a report that it has shifted its investment strategy to allocate part of its capital into Bitcoin Exchange Traded Funds (ETFs). The article published by The Korea Economic Daily titled, ‘KTCU to be Korea’s first pension fund to invest in cryptocurrency ETF’ got the entire crypto community abuzz with excitement. 

The move is seen as a leap of faith because pension funds are often regarded as conventional investors that favor low-risk traditional products. If the rumor is true, it also signals a departure from the institution’s usual investment strategy.

In a statement released by KTCU and quoted in The Korea Herald, it says - The KTCU has never reviewed an investment in a bitcoin-related ETF, and will never have a plan to do so’

KTCU is a pension fund with $47 billion of Asset Under Management (AUM) raised eyebrows when the local daily published the report. KTCU is dedicated to promoting teachers’ welfare and financial benefits and investment by pension funds is the clearest sign that Bitcoin is now regarded by institutional investors as a mainstream asset. 


Korean Crypto Regulation 

Korea continues to rein in on the crypto ecosystem and the latest decision to proceed to tax crypto earnings of more than 2.5 million Korean won (approximately $2,105) affirms the government’s tough stance against the crypto industry. The Korean authority has recently shut down more than half of the crypto exchanges operating within its jurisdiction for failing to get the relevant approvals from the Financial Services Commission (FSC). 

Source: Korea is still maintaining a very conservative approach towards crypto assets 

Given the general policy and regulatory sentiment in Korea, institutional investment decisions are unlikely to favor the crypto industry. Whilst in the US, institutions are taking bold steps ahead. 

In a recent announcement, the Houston Firefighters' Relief and Retirement Fund has bought into Bitcoin and Ethereum. This is probably a result of the recent Bitcoin ETF’s approval by the SEC which is seen by observers as the regulator’s stamp of approval for the new asset class. 


Institutional Boost of Confidence

It would be ideal for traditional institutions such as pension funds to dip their toes into crypto-related investments. This is because pension funds are geared towards capital preservation rather than growth. If Bitcoin can provide this assurance, its narrative as a store of value is bolstered. 

Source: Pension funds are generally risk-averse in their investment strategy  

Mass institutional adoption for crypto assets may not take place at the pace that many enthusiasts would have wished. Cryptos as an asset class still suffers from volatility and once this massive price fluctuation decreases, it becomes a more viable alternative to other traditional assets. 

Tags:
Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.