One of Canada’s Largest Pension Funds Abandons Crypto Investment Plans

CPP Investments (CPPI), one of Canada’s largest pension funds, reportedly gave on researching cryptocurrencies. CPPI’s Alpha Generation Lab, the team dedicated to investigating emerging and trending investments, has been looking into digital assets since early 2021 but has allegedly been reassigned sometime around July 2022.

CPPI Gives up on Its Crypto Research

CPPI, a pension fund managing $388 billion for 20 million Canadians, has reportedly been researching cryptocurrencies since early 2021. While expressing some interest in digital assets, the funds’ CEO John Graham, hired in February 2021, stated they wouldn’t invest without first looking into crypto’s “underlying intrinsic value” in a June speech:

You want to really think about what the underlying intrinsic value is of some of these assets and build your portfolio accordingly. So I’d say crypto is something we continue to look at and try to understand, but we just haven’t really invested in it.

Reportedly, the Alpha Generation Lab, the department assigned to assessing cryptocurrencies, got reassigned from the task sometime around July 2022. While no explicit reason for the change in course has been given at the time of writing, it is likely at least somewhat influenced by the losses suffered by other big Canadian pension funds as a result of the bankruptcies of Celsius and FTX.

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Cryptocurrencies and Pension Funds

Considering that the market cap of cryptocurrencies fell by around $2 trillion between late 2021 and late 2022, it isn’t too strange that many institutional and retail investors lost large parts of their investments. Perhaps some of the stranges big losses have been taken by some of Canada’s largest pension funds.

After Celsius went bankrupt in July, Caisse de dépôt et placement du Québec (CDPQ) announced it had lost its entire $150 million investment in the Network. More recently, Another pension fund Ontario Teachers’ announced it had written off its investment into FTX after Sam Bankman-Fried’s company filed for bankruptcy.

In the United States, Fidelity has been under pressure over its 401(k) Bitcoin offering throughout 2022. In late November, the company received its third letter this year from US senators urging it to remove BTC from its pension plans. Despite the “crypto winter”, Fidelity has been increasing its involvement with cryptocurrencies and recently announced its plans to offer commission-free digital asset trading in multiple states.

Do you think the negative experience of Canadian pension funds will ultimately affect Fidelity’s 401(k) Bitcoin offering? Let us know in the comments below.