Some pensions funds that experimented with emerging assets like cryptocurrency have lost millions of dollars.
Pension funds are in a perpetual crisis worldwide, with low demographic rates in many countries foreshadowing a dim future for such investments, combined with young people’s lack of faith in the continued existence of social security models.
In order to stay afloat, many pension funds have strived to remain apprised of new investment opportunities, including cryptocurrencies. According to a 2022 study published by the CFA Institute, “94% of state and government-sponsored pension funds are invested in one or more cryptocurrencies.”
But pension fund interest in volatile cryptocurrencies has not come without consequences.
In April 2023, Ontario Teachers’ Pension Plan (OTPP) backed off from investing in the cryptocurrency sector after losing $95 million on its stake in FTX.
Artificial intelligence (AI) and digital assets share a similar hype.
For better or for worse, this relationship could affect them.