AMP Becomes First Australian Super Fund to Invest in Bitcoin, Sparking Industry Debate

 

AMP, one of Australia’s leading superannuation funds, has taken a bold step into the cryptocurrency space by investing $27 million in Bitcoin. This makes it the first major fund in the country’s superannuation industry to gain exposure to the volatile asset class. The decision, announced on December 12, has ignited debate over the role of digital assets in retirement portfolios.

 

A Strategic Diversification Move

 

AMP’s Bitcoin allocation represents just 0.05% of its $57 billion in assets under management. Chief Investment Officer Anna Shelley explained that the investment, made in May when Bitcoin was trading between $60,000 and $70,000, aligns with AMP’s dynamic asset allocation strategy. The decision was driven by Bitcoin’s “momentum and sentiment” in the market.

“We generally thought that even though crypto is risky, new, and not yet fully proven, it had become too big, and its potential too great to ignore,” said Stephen Flegg, AMP’s senior portfolio manager.

Customers with balanced and high-growth portfolios are the most likely to see exposure to Bitcoin, though allocations remain minimal across all investment options.

 

 

 

Industry Reaction: Divided Opinions

 

While AMP has embraced cryptocurrency as part of its diversification strategy, other major funds have voiced scepticism. AustralianSuper, the nation’s largest fund, stated it has no plans to invest directly in cryptocurrencies, though it is exploring blockchain-related opportunities. Similarly, Australian Retirement Trust and retail giant MLC cited Bitcoin’s volatility and lack of yield as key reasons for staying away.

Reserve Bank of Australia Governor Michele Bullock has also expressed concerns, calling Bitcoin unsuitable for the Australian economy. Critics argue that Bitcoin’s high price swings and inability to generate dividends or interest make it an imprudent choice for retirement savings.

“Cryptocurrency lacks the characteristics of traditional assets like equities or bonds that deliver consistent income or growth,” said Brian Parker, chief economist at Australian Retirement Trust.

 

The Crypto Debate: Speculation vs. Growth Potential

 

Despite the criticism, AMP’s move reflects a growing recognition of Bitcoin’s potential as a mainstream investment. Caroline Bowler, CEO of Australia-based crypto exchange BTC Markets, likened Bitcoin’s current status to tech stocks in the 1990s.

“The digital asset class is still in its infancy. Those who didn’t see the value in tech stocks back then missed out on a revolution,” Bowler remarked.

Professor Richard Holden of the University of New South Wales called AMP’s investment a significant moment for public-offer super funds. However, he warned against overexposure by everyday investors, noting Bitcoin’s speculative nature and historical volatility.

 

Broader Trends in Crypto Adoption

 

AMP’s Bitcoin investment mirrors a broader global trend of institutional interest in cryptocurrencies, spurred by the launch of regulated products such as spot Bitcoin ETFs. In the U.S., BlackRock’s iShares Bitcoin Trust has emerged as a leading vehicle for crypto exposure, managing over $50 billion in assets. BlackRock recently recommended a 1-2% Bitcoin allocation for diversified portfolios, citing the asset’s diversification benefits and low correlation with traditional investments.

 

The Road Ahead for AMP and Super Funds

 

For AMP, the Bitcoin allocation represents the upper risk limit of its cryptocurrency exposure, according to Shelley. The company plans to carefully monitor its holdings while maintaining a diversified portfolio.

While other Australian super funds remain cautious, AMP’s foray into crypto could pave the way for further exploration of digital assets in the retirement savings industry. As cryptocurrency markets mature and regulations evolve, the integration of digital assets into traditional portfolios may become increasingly common.

For now, AMP’s move is a bold experiment in balancing innovation with fiduciary responsibility—one that could reshape the future of superannuation investments in Australia.