South Korea’s National Pension Service (NPS), one of the world’s largest pension funds, purchased approximately $20 million worth of Coinbase stock (COIN), an investment that has generated an unrealistic 40% gain for the fund. .
The move will mark the first time that NPS will include a crypto-based company in its US stock portfolio.
NPS buys Coinbase shares at a profit
According to a report by local news outlet News1, in a stock holding report submitted to the US Securities and Exchange Commission (SEC) on November 16, 2023, NPS revealed that it purchased 282,673 COIN shares in the third quarter of 2023.
The shares were purchased at an average unit price of $70.5 per unit, valuing it at $19.9 million or 26 billion won. As Coinbase shares closed at $98.15 on November 15, the value of the NPS purchase increased to $27.74 million, representing an increase of approximately 40%.
While COIN is still down from its peak of above $300 in 2021, the stock has seen a steady rise in value in 2023, reaching more than $110 per share in July.
In its latest earnings report for the third quarter, Coinbase reported total revenue of more than $674 million, compared to more than $590 million in the second quarter of 2022. The US crypto exchange also suffered a net loss of $2 million in Q3 2023, a significant decrease. Up from its previous record of $545 million in the same period in 2022.
Meanwhile, the company’s surge in 2023 comes amid an ongoing lawsuit with the SEC alleging the platform violated securities laws. Coinbase later filed a motion to dismiss the regulator’s complaint, arguing that the SEC’s allegations were without legal citation.
First time for NPS
As reported by News1, the NPS investment in COIN shares is the first of its kind for the pension fund, which has a policy of not investing in digital assets due to volatile price fluctuations.
Meanwhile, South Korea’s National Assembly had earlier criticized the NPS for indirectly investing in the digital asset business. The pension fund giant responded to the criticism, saying it only invested in crypto exchanges and had no interest in allocating any funds to cryptocurrencies.
While NPS investments in Coinbase shares may have brought some benefits to the fund, some pension funds have not been so lucky after entering crypto.
Canada’s largest pension fund, the Ontario Teachers’ Pension Plan, said it will stay away from crypto after its sour experience with the collapsed FTX. Another major Canadian pension fund, Caisse de dépôt et placement du Québec (CDPQ), wrote off its investment in Celsius after the crypto lender filed for bankruptcy in August 2022.
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