The NPS Expands into Cryptocurrency Sector
The National Pension Service of South Korea, the world's third-largest pension fund, has made its first move into the cryptocurrency sector. Regulatory filings with the U.S. Securities and Exchange Commission (SEC) reveal that the NPS acquired 282,673 shares of Coinbase Global in the third quarter of 2023, at a cost of approximately $20 million.
Overview of the National Pension Service
Established in 1988, the National Pension Service is South Korea's public pension fund. Overseen by the National Pension Service Investment Management (NPSIM), the scheme requires enrollment for both Korean citizens and foreign residents in Korea. With assets worth around $755 billion, the NPS manages a significant portfolio.
Investment in Coinbase Global
The recent SEC filing disclosed that the NPS invested in Coinbase Global, a publicly traded company listed on Nasdaq. The pension fund purchased 282,673 shares of Coinbase at an average price of $70.5 per share, resulting in a total investment of $20 million.
Appreciation of Coinbase Shares
Since the NPS made its investment, the value of Coinbase shares has risen by 40%. Currently trading at $98.15 per share, the price reflects a significant 26% increase in the last month. The NPSIM's decision to invest in Coinbase shares aligns with a global trend where entities opt for lower-risk alternatives to direct cryptocurrency holdings.
Performance of the NPS
In 2022, the NPS experienced a negative accumulated return of -79.6 trillion won ($60.17 billion), leading to an annualized return of -8.22%. However, this year has been more favorable, with a positive return of 95.2 trillion won ($71.96 billion) so far. The NPS's recent move into the cryptocurrency sector may be an attempt to counterbalance the losses incurred last year.
Opinions on the Investment
What are your thoughts on the National Pension Service's $20 million investment in Coinbase shares? Do you believe it is a wise move for the pension fund to enter the cryptocurrency sector? Share your opinions and insights in the comments section below.
Frequently Asked Questions
How does the gold and silver IRA function?
A gold and silver IRA allows you to invest in precious metals, such as gold and silver, without paying taxes on any gains. They are a good investment option for those who wish to diversify their portfolios.
You do not have to pay income tax on interest earned from these accounts if you are over 59 1/2. On any appreciation in value of the account, you don't have to pay capital gain tax. There are limits on the amount of money that you can place into this account. The minimum amount you can put into this account is $10,000. If you are less than 59 1/2, you cannot invest. The maximum annual contribution is $5,000.
If you die before retirement, your beneficiaries may receive less than the full amount in your account. After paying all expenses, your assets must be sufficient to cover the remaining balance in your account.
While some banks offer gold and/or silver IRA options to their customers, others require them to open a regular brokerage bank account that allows you to purchase certificates or shares.
What kind of IRA can you use to hold precious metals in?
Many financial institutions and employers offer an individual retirement account (IRA) as an investment option. An IRA allows you to contribute money that is tax-deferred until it is withdrawn.
An IRA allows for you to save taxes while still paying taxes when you retire. This allows you to save more money today and pay less taxes tomorrow.
An IRA is a tax-free way to make contributions and earn income until you withdraw the funds. You can face penalties if you withdraw funds before the deadline.
You can also make additional contributions to your IRA after age 50 without penalty. If you decide to withdraw funds from your IRA while you are still working, you'll owe income-taxes and a 10% penalty.
Withdrawals before age 59 1/2 will be subject to a 5% IRS penal. Between the ages of 591/2 and 70 1/2, withdrawals are subject to a 3.4% IRS penal.
The IRS will penalize withdrawals of more than $10,000 annually.
Can you make money from a gold IRA
You must first understand the market and then know which products are available to make money.
You shouldn't trade if you don't have the right information.
Also, you should find the broker that provides the best service possible for your account type.
There are many accounts available, including Roth IRAs and standard IRAs.
A rollover may be an option if you have other investments like stocks or bonds.
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How to Open a Precious Metal IRA
Precious Metals are one of today's most desired investment vehicles. Precious metals are a popular investment option because they provide investors with higher returns than traditional bonds and stocks. However, precious metals investing requires careful planning and research. This is what you need to know before you open your precious metal IRA.
There are two main types for precious metal accounts: paper gold and Silver certificates (GSCs), and physical precious Metals accounts. Each type has advantages and drawbacks. GSCs, on the other hand, are more accessible and can be traded. You can read more about them below.
Physical precious Metals accounts consist of bullion, bullion, and bars. This option is great for diversification, but it has its drawbacks. It is expensive to buy, store, and sell precious metals. Moreover, their large size can be difficult to transport them from one location to another.
The silver and paper gold certificates are also relatively affordable. Additionally, they can be easily traded online and accessible. This makes them ideal for people who don't want to invest in precious physical metals. However, they aren't as diversified as their physical counterparts. These assets are also supported by government agencies, such as the U.S. Mint. Inflation rates could cause their value to drop.
If you open a precious metal IRA, choose the right account for your financial situation. These are some factors to consider before you do this:
- Your tolerance level
- Your preferred asset allocation strategy
- How much time will you invest?
- It is up to you whether you intend on using the funds short-term for trading purposes.
- Which type of tax treatment would you prefer
- Which precious metal(s) you'd like to invest in
- How liquid can your portfolio have to be
- Your retirement age
- Where to store precious metals
- Your income level
- Current savings rate
- Your future goals
- Your net worth
- Any special circumstances that may affect your decision
- Your overall financial picture
- You choose between paper and tangible assets
- Your willingness and ability to take risks
- Your ability and willingness to accept losses
- Your budget constraints
- Financial independence is what you want
- Your investment experience
- Your familiarity with precious and rare metals
- Your knowledge about precious metals
- Your confidence in economy
- Your personal preferences
Once you have decided which type of precious-metal IRA is best for you, it's time to open an account at a reputable dealer. You can find these companies through referrals, word of mouth, or online research.
Once you have opened your precious-metal IRA, it is time to decide how much you want to deposit. Every precious metal IRA account will have a different minimum initial deposit amount. Some accounts will only accept $100, others will allow for you to invest as high as $50,000.
As stated above, the amount of money invested in your precious metal IRA is completely up to you. If you're looking to build wealth over a long period, you should probably opt for a larger initial deposit. However, a smaller initial deposit might work for you if your goal is to invest less money each month.
You can buy any type of investment, regardless of the amount of precious metals in your IRA. The most popular are:
- Gold – Bullion bars, rounds, and coins
- Silver – Rounds & coins
- Platinum – Coins
- Palladium Round and Bar Forms
- Mercury – Bar and round forms
By: Jamie Redman
Title: National Pension Service of South Korea Acquires 282,673 Shares of Coinbase Global
Sourced From: news.bitcoin.com/south-koreas-national-pension-service-dives-into-crypto-with-20m-coinbase-investment/
Published Date: Fri, 17 Nov 2023 09:00:12 +0000