South Korea's National Pension Service (NPS) has realized a substantial profit from its recent foray into the cryptocurrency space, securing a 40% gain on its investment in Coinbase (NASDAQ:COIN) shares within a single quarter. The state-run pension fund, which faced scrutiny over its indirect investments in virtual assets in 2021, purchased 282,673 shares of the Nasdaq-listed cryptocurrency exchange at an average price of $70.5 each, amounting to nearly 26 billion Korean won (₩), or approximately $20 million.
The strategic investment by NPS comes as digital assets continue to gain acceptance among institutional investors as a means of diversification. A recent Pensions Age survey highlighted the growing recognition of digital assets' importance in investment portfolios. This sentiment is reflected in the performance of Coinbase's stock, which has witnessed a significant uptick this year, with shares rising by 4% in Q3 and 177% overall.
The timing of NPS's investment coincided with a surge in Bitcoin value, which reached an 18-month peak on November 9, contributing to a 5.14% rise in Coinbase's stock that closed at $92.86. With the closing price of Coinbase reaching $98.15 recently, the value of NPS's stake in the company has appreciated to approximately $27.74 million.
This successful investment outcome showcases NPS's ability to navigate the volatile cryptocurrency market and capitalize on timely market movements. The pension fund's entry into digital asset investing, despite earlier criticisms from South Korea's National Assembly concerning the cashless nature of virtual assets and their dependency on subsequent investors for returns, has proven profitable in the short term.
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