In a LinkedIn post last week, Steve Flegg, senior portfolio manager at AMP, explained that crypto had grown "too big" and its potential "too great" to ignore any longer. As a result, AMP has decided to invest a portion of its superannuation assets in bitcoin.
Speaking to InvestorDaily, Stuart Eliot, AMP's head of portfolio management, clarified that after "testing and careful consideration by our investment team and committee," the company decided to include "a small and risk-controlled position" in digital assets within its Dynamic Asset Allocation program earlier this year.
Commenting on this news, Caroline Bowler, CEO of BTC Markets, said the crypto exchange is "excited to see AMP stepping into the crypto space”.
“I couldn't agree more with their strategic approach,” Bowler told InvestorDaily in a written statement.
"The crypto market has grown too significant to ignore. It's not just about the buzz; it's about the real potential bitcoin holds as part of a diversified investment strategy.
“By integrating bitcoin into their Dynamic Asset Allocation program, AMP shows a forward-thinking mindset that aligns perfectly with the transformative changes we've seen in the financial industry this year”.
Bowler also noted that by acknowledging the volatility and managing the exposure to only 0.05 per cent of their assets, AMP is not just dabbling, but are “taking a measured step into digital assets”.
“This cautious, yet innovative, approach ensures that super members can benefit from bitcoin's upward trends while being shielded from its more notorious swings,” she said.
While noting that scepticism is understandable, Bowler explained that what's often overlooked is bitcoin's role in the digital asset industry and its potential for significant long-term growth.
“The digital asset class is still in its infancy, much like the internet was in the '90s. Those who didn't see the value in tech stocks back then missed out on a revolution,” she said.
"The interest in crypto among Australian investors, as noted in the ASX study, suggests a market ripe for exploration. It's not just about chasing gains; it's about recognising a new asset class that's here to stay and understanding how it fits into a broader, diversified portfolio.”
According to AMP’s Eliot, the bitcoin exposure, which represents around 0.05 per cent of its total superannuation assets under management, “recognises the structural changes in the industry over the past year, including the launch of exchange traded funds by leading international investment managers”.
“While our super members have benefited from the exposure, we fully appreciate the risk and volatility characteristics of this emerging asset class and will continue to carefully manage our holding, which is a fractional component of a highly diversified asset mix,” Eliot said.
Leading superannuation experts have previously dismissed cryptocurrency as a viable investment for retirement portfolios, citing its speculative nature and extreme volatility.
CFS CIO Jonathan Armitage and ART chief economist Brian Parker emphasised this year the lack of income generation, valuation challenges, and unpredictable behaviour across economic cycles as major barriers to inclusion.
