NPS Invests in Coinbase Shares for First Time, Earns 40% Profit
South Korea’s National Pension Service (NPS), one of the world’s largest pension funds, recently purchased approximately $20 million worth of Coinbase stock (COIN), resulting in an unrealized 40% profit for the fund. This marks the first time that NPS has included 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, with an average unit price of $70.5 per share. The purchase amounted 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%.
Despite COIN being down from its peak of above $300 in 2021, it has seen steady growth in value in 2023, reaching over $110 per share in July.
Coinbase reported a total revenue of over $674 million in its latest earnings report for Q3 2023, with a net loss of $2 million, significantly lower than its previous record of $545 million during the same period in 2022.
The company’s growth comes amid an ongoing lawsuit with the SEC, which alleged that the platform violated securities laws. However, Coinbase filed a motion to dismiss the complaint.
A First for NPS
NPS’ investment in COIN shares is unprecedented for the pension fund as it typically avoids investing in digital assets due to their volatile price swings. The National Assembly previously criticized NPS for indirect investment in a digital asset business but clarified that it only invested in the crypto exchange and had no plans to allocate funds to cryptocurrency.
While NPS’ investment yielded profit, other pension funds have not been as fortunate following their ventures into crypto. Canada’s Ontario Teachers’ Pension Plan and Caisse de dépôt et placement du Québec (CDPQ) experienced losses after their investments in FTX and Celsius respectively.
Hot Take: NPS Breaks Tradition and Profits from Crypto Investment
South Korea’s National Pension Service took a risk by investing in Coinbase shares despite its policy against digital asset investments and reaped significant profits as a result. This move may pave the way for other traditional financial institutions to reconsider their stance on crypto investments given the potential returns available in this emerging market.
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