The year 2024 has undeniably marked a bull run for cryptocurrencies. Bitcoin (BTC), the market leader, surged 1.2 times its value and even breached the historic $100,000 milestone for the first time in December. Ethereum (ETH) wasn’t far behind, climbing 45.6% over the same period. This momentum has caught the attention of traditionally conservative financial institutions — including retirement funds — now cautiously exploring crypto exposure.
Recent reports suggest that President-elect Donald Trump is preparing an executive order to elevate cryptocurrency as a national policy priority, granting industry leaders a formal voice in regulatory discussions. This news propelled Bitcoin back above $100,000 on Thursday, trading around $101,800.
Retirement Funds Enter the Crypto Arena
Once skeptical, retirement fund managers are now taking measured steps into digital assets. With Bitcoin’s impressive 2024 performance, even risk-averse institutions can no longer ignore the potential returns offered by cryptocurrencies.
Steve Flegg, Senior Investment Portfolio Manager at AMP Capital — a major Australian retirement fund manager — told the Financial Times that his team made a bold move this year: allocating a modest portion of their portfolio to Bitcoin futures.
"We generally believe that while cryptocurrencies are risky, novel, and not yet fully proven, they have become too large and too promising to continue ignoring."
This shift raises an important question: If Hong Kong’s Mandatory Provident Fund (MPF) schemes began offering Bitcoin ETFs or similar crypto-linked products, would you consider including them in your retirement strategy?
Two Key Drivers Behind Retirement Funds’ Crypto Interest
According to the Financial Times, public pension plans in Wisconsin and Michigan are among the largest holders of U.S.-listed crypto-focused equity funds. In the UK and Australia, some retirement fund managers have started using ETFs or derivatives to gain small exposures to Bitcoin.
Two pivotal developments have catalyzed this growing institutional interest:
- Donald Trump’s pro-crypto presidency
- U.S. approval of spot Bitcoin and Ethereum ETFs
Trump’s Pro-Crypto Stance Sparks Market Confidence
Analysts predict that under a Trump administration — known for supporting deregulation and innovation in the crypto space — digital asset prices could double again in 2025. The president-elect has publicly vowed to make the U.S. the global leader in Bitcoin mining and adoption.
Matt Scott, a consultant at Mercer who advises UK pension funds, noted a sharp rise in inquiries about Bitcoin since the U.S. election:
"Trustees don’t like admitting there’s a popular asset class they know nothing about."
This psychological shift — from dismissal to curiosity — is accelerating institutional exploration of crypto.
Spot Crypto ETFs Fuel Retirement Fund Adoption
Most retirement funds are avoiding direct crypto holdings and instead turning to spot cryptocurrency ETFs, which launched in the U.S. in 2024. These funds hold actual Bitcoin or Ethereum and track their real-time prices, offering regulated exposure without custody risks.
BlackRock’s iShares Bitcoin Trust (IBIT) saw significant institutional uptake. Regulatory filings show that by September 2024, the Wisconsin Investment Board ranked as the 12th-largest shareholder, with holdings valued at approximately $155 million. The fund rose 50% in Q3 alone.
Similarly, Michigan emerged as the sixth-largest holder of Grayscale’s Ethereum Trust (ETHE), with a $12.9 million stake. It also ranks 11th among investors in ARK 21Shares Bitcoin ETF (ARKB), managed by Cathie Wood’s Ark Invest — a fund that gained 14% post-election.
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Learning from Past Mistakes: A Cautious Comeback
Retirement funds aren’t new to crypto — but past experiences were painful. In 2022’s bear market, several suffered major losses.
The Ontario Teachers’ Pension Plan wrote off $95 million invested in FTX, the now-bankrupt exchange co-founded by Sam Bankman-Fried, who was later convicted of fraud and sentenced to prison.
Caisse de dépôt et placement du Québec, Canada’s second-largest pension manager, admitted its $150 million investment in crypto lender Celsius Network was “too early,” resulting in a full write-down.
Yet, setbacks haven’t deterred long-term interest. Alex Pollak, head of 21Shares UK and Israel, believes the industry’s worst headwinds are behind it:
"We’re going to see more and more pension schemes adopting crypto — not because of hype, but because the infrastructure and regulation are finally maturing."
Individual Investors Demand Crypto Access
In the UK, some pension contributors are pushing for direct access to Bitcoin. Cartwright, a retirement advisory firm, facilitated its first direct Bitcoin transaction for a £50 million private pension fund planning to allocate £1.5 million directly into BTC — bypassing ETFs entirely.
Sam Roberts, Investment Consulting Director at Cartwright, revealed that over 50 individual savers have contacted them expressing dissatisfaction with traditional pension returns:
"They want to move their entire retirement savings into cryptocurrency."
The firm is also in talks with two multi-employer pension schemes to launch dedicated Bitcoin investment options — a move aimed at retaining clients seeking higher growth potential.
Should You Invest Retirement Savings in Crypto?
Despite growing institutional interest, experts remain cautious.
In December 2024, the U.S. Government Accountability Office reviewed 69 crypto investment options available in retirement plans and issued a stark warning:
"Cryptocurrencies exhibit unusually high volatility."
Daniel Peters, Partner at Aon’s Global Investment practice, argues that crypto should not be part of retirement portfolios:
"Due to extreme volatility and the lack of a robust valuation framework, we fundamentally believe cryptocurrencies should not be part of retirement strategies — unless allocated through professional managers."
Frequently Asked Questions (FAQ)
Q: Can I invest my retirement fund directly in Bitcoin today?
A: In most jurisdictions, direct investment isn’t allowed through standard pension schemes. However, some private or self-directed plans may permit exposure via spot ETFs or trusts.
Q: Why are retirement funds now considering crypto despite its volatility?
A: Strong 2024 performance, regulatory clarity via ETF approvals, and political support have reduced perceived risk. Many view small allocations as strategic hedges or growth accelerators.
Q: Is Bitcoin a good long-term retirement investment?
A: While promising, Bitcoin remains highly speculative. Most financial advisors recommend keeping exposure minimal — if any — within retirement portfolios.
Q: How do spot Bitcoin ETFs differ from futures-based ones?
A: Spot ETFs hold actual Bitcoin and reflect real-time prices, while futures ETFs track derivative contracts. Spot ETFs are considered more transparent and less volatile.
Q: What percentage of a retirement portfolio should be in crypto?
A: Most experts suggest no more than 1–2%, if included at all. BlackRock itself recommends this range, comparing crypto’s risk profile to that of tech stocks like the "Magnificent Seven."
Q: Are there risks beyond price volatility in crypto retirement investing?
A: Yes — including regulatory uncertainty, cybersecurity threats, custody issues, and limited historical performance data during economic downturns.
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Final Thoughts
While full-scale adoption remains distant, the era of total exclusion is over. From Wisconsin to Westminster, retirement funds are beginning to test the waters — not with reckless bets, but with structured, regulated instruments like spot ETFs.
For individual investors, this shift signals both opportunity and caution. As crypto becomes part of mainstream finance, understanding its role — and limits — in long-term wealth building has never been more important.
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