The National Pension Service (NPS) of South Korea, one of the world’s largest pension funds, has made a significant move into the cryptocurrency space by purchasing over 280,000 shares of global cryptocurrency exchange Coinbase in the third quarter of 2023. This investment, totaling approximately $20 million, has already gained a 39% return.
Prudent Approach of the NPS towards Cryptocurrencies
The NPS investment in Coinbase, currently valued at $27.7 million, marks the first time the pension fund has purchased shares in a cryptocurrency exchange. The fund had maintained a cautious approach towards direct investments in cryptocurrencies like Bitcoin due to their volatility.
This investment comes despite the criticism from the South Korean National Assembly in 2021 regarding the NPS’s involvement in cryptocurrency-related activities, to which the NPS responded by stating that it was solely focused on the exchange and not the cryptocurrencies themselves.
Coinbase’s Performance and Legal Challenges
Coinbase’s stock has seen significant growth in 2023, reaching as high as $110 per share in July and adding almost 170% in value since the beginning of the year, compared to around $37 at the start of the year. However, it remains 74% below its all-time high of over $300 in September 2021. This growth has occurred despite Coinbase facing legal action from the U.S. SEC, which alleges that the exchange violated securities laws by offering unregistered securities.
In response, Coinbase has challenged the SEC’s authority in the cryptocurrency space, questioning the broad definition of securities applied by the Commission.
