World’s Third-Largest Pension Fund Invests $34M in MicroStrategy

TLDR

• South Korea’s National Pension Service (NPS) bought 24,500 shares of MicroStrategy worth nearly $34 million in the second quarter of 2024.
• After MicroStrategy’s 10-for-1 stock split, this translates to 245,000 shares.
• NPS also holds 229,807 shares of Coinbase worth over $45 million.
• MicroStrategy is the largest corporate holder of Bitcoin, with 226,500 BTC worth around $13.19 billion.
• The NPS purchase can be seen as an indirect investment in Bitcoin.
• MicroStrategy’s stock price has increased by 92.5% so far in 2024.

South Korea’s National Pension Service (NPS), the world’s third-largest public pension fund, has made a significant move into the cryptocurrency space by purchasing shares of MicroStrategy, a business intelligence firm known for its substantial Bitcoin holdings.

According to a filing made public this week, the NPS bought 24,500 shares of MicroStrategy in the second quarter of 2024, at an average price of $1,377.48 per share. This investment, worth nearly $34 million at the time of purchase, came before MicroStrategy announced a 10-for-1 stock split in early August.

Following the split, the NPS now holds 245,000 shares, valued at approximately $32.32 million based on MicroStrategy’s recent closing price of $131.93.

This move by the NPS is particularly noteworthy as it can be seen as an indirect investment in Bitcoin. MicroStrategy, led by CEO Michael Saylor, is currently the largest corporate holder of Bitcoin, with 226,500 BTC in its treasury. At current prices, this Bitcoin holding is worth around $13.19 billion.

The NPS, which manages over 1 trillion won ($777 billion) in total assets, is not new to cryptocurrency-related investments. The fund also holds 229,807 shares of Coinbase, the popular cryptocurrency exchange, worth over $45 million. The NPS began purchasing Coinbase shares in 2023, initially acquiring 282,673 shares at an average price of $70.5.

These investments by the NPS reflect a growing trend of institutional investors gaining exposure to the cryptocurrency market through publicly traded companies. By investing in firms like MicroStrategy and Coinbase, these large funds can indirectly participate in the cryptocurrency market without directly holding or managing digital assets.

MicroStrategy’s stock has performed exceptionally well in 2024, seeing a 92.5% gain year-to-date. The company’s stock price recently climbed above $150 for the first time in over 24 years.

This performance has attracted attention from other institutional investors and fund managers. For instance, Defiance ETFs recently launched a United States-based fund that targets a 175% long daily exposure to MicroStrategy.

The company’s Bitcoin strategy, initiated in August 2020, has been a key driver of its stock performance. In its August earnings report, MicroStrategy disclosed that it had purchased an additional 12,222 Bitcoin for $805 million in the second quarter alone.

The NPS is not alone in its interest in MicroStrategy. Other major institutional investors, including Norway’s central bank and the Swiss National Bank, have also disclosed holdings in the company. This trend suggests a growing acceptance of Bitcoin as a legitimate asset class among traditional financial institutions.

For South Korea, a country known for its tech-savvy population and progressive stance on digital technologies, this move by its national pension fund could signal a broader shift in attitude towards cryptocurrencies.

While the country has implemented strict regulations on cryptocurrency trading in recent years, this investment by the NPS might indicate a more nuanced approach to digital assets at the institutional level.