South Korean Pension Fund Giant Invests $20 Million in Coinbase Shares in Q3 2023
South Korea’s National Pension Service (NPS), which is one of the largest pension funds in the world, bought approximately $20 million worth of Coinbase stock (COIN), an investment that has raked in an unrealized 40% profit for the fund.
The move marked the first time NPS would include a crypto-based company in its U.S. stock portfolio.
NPS Coinbase Shares Purchase in Profit
In a stock holdings report submitted to the U.S. Securities and Exchange Commission (SEC) on Nov. 16, 2023, NPS revealed that it bought 282,673 COIN shares in the third quarter of 2023, according to a report from local news outlet News1.
The shares were purchased at an average unit price of $70.5 per one, amounting to a valuation of $19.9 million or 26 billion won. With Coinbase’s shares closing at $98.15 on Nov. 15, the value of NPS’ purchase grew to $27.74 million, marking an increase of about 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 over $110 per share in July.
Coinbase, in its latest earnings report for the third quarter, recorded a total revenue of over $674 million, compared to more than $590 million in Q2 2022. The U.S. crypto exchange also had a net loss of $2 million in Q3 2023, a significant reduction from its previous record of $545 million in the same period in 2022.
Meanwhile, the company’s growth in 2023 comes amid an ongoing lawsuit with the SEC, which alleged that the platform violated securities laws. Coinbase later filed a motion to dismiss the regulator’s complaint, arguing that the SEC’s allegation was without legal citation.
A First for NPS
NPS investment in COIN shares is a first of its kind for the pension fund, which has a policy of not investing in digital assets due to their volatile price swings, as reported by News1.
Meanwhile, South Korea’s National Assembly previously criticized NPS for its indirect investment in a digital asset business. The pension fund giant responded to the criticism, stating that it only invested in the crypto exchange and was not interested in allocating any funds to cryptocurrency.
While NPS’ investment in Coinbase shares may have yielded some profit for the fund, some pension funds have not been as lucky following their foray into crypto.
Canada’s largest pension fund, Ontario Teachers’ Pension Plan, said that it would 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), in August 2022, wrote off its investment in Celsius after the crypto lender filed for bankruptcy.
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