CPP Investments, the largest pension in Canada, has given up on researching potential investment opportunities in cryptocurrencies, following a series of high-profile crypto exchange collapses over the past year.
According to people familiar with the matter cited by Reuters, the CPPI recently abandoned efforts of studying cryptocurrencies, after dedicating almost an entire year of research into the volatile space. The pension fund’s Alpha Generation Lab, which consisted of three employees tasked with examining upcoming investment trends related to blockchains, has been disassembled and the team diverted to other investment areas.
It remains unclear why, exactly, the pension fund halted the research efforts, but the timing coincides with a several major setbacks in the virtual currency space, including the collapse of crypto lender Celsius earlier this year, and crypto exchange FTX’s bankruptcy filing last month. CPP Investments has thus far refrained from commenting on the development, but did say it hadn’t made any crypto investments, despite researching the sector.
Indeed, the pension fund’s CEO, John Graham, recently sounded caution against piling funds into crypto merely over fears of missing out: “You want to really think about what the underlying intrinsic value is of some of these assets and build your portfolio accordingly,” he said back in June, as cited by Reuters. “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.”
Canadian pension funds have recently come under scrutiny following the collapse of FTX, of which the Ontario’s Teachers’ Pension Plan invested $95 million in. Although Canadian pension funds aren’t barred from purchasing cryptocurrencies, they are typically heralded for their low-risk investment strategies, which is contrary to the high-risk scenarios accompanying virtual currencies.
Information for this briefing was found via Reuters and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.