“It is extremely difficult to get pension funds to make allocations into new asset classes. I have worked with pension funds and they generally have a lot of rules, regulations and procedures that they need to follow.”
As Tchir points out, public pension funds are governed by mandates and general investment behavior that shuns industries and projects with passing interest. The fact that multiple pension funds are now turning to Bitcoin and cryptocurrency for long-term investment gives a good indication that financial experts and analysts are turning positive on the industry’s outlook.
In addition, the action of FairFax County, University of Michigan and other large name funds is likely to have a snowball effect on the pension investment landscape. According to Tchir, “If some funds [invested in cryptocurrency], it is likely other funds will too.” The barrier to entry for investing in cryptocurrency–i.e. being the first mover–has likely delayed the entrance of pensions into the industry longer than it would have otherwise. Whether because of the perception of cryptocurrency, the risk inherent in the market volatility and lack of regulation, or the waning public perception following 13 months of bear market conditions, the majority of pensions have thus far avoided crypto funds.
