South Korea’s National Pension Service (NPS) has recently made a significant profit of 40% from its investment in Coinbase, a prominent cryptocurrency exchange based in the United States. In the third quarter of this year, the fund acquired over 280,000 shares of Coinbase, amounting to approximately $20 million. This investment proved lucrative for the NPS, considering the inherent market fluctuations of the cryptocurrency industry that often deter institutional investors from direct investments in digital assets like Bitcoin.
Rather than directly participating in the volatile cryptocurrency market, investment funds like the NPS prefer to gain exposure to the emerging industry by investing in companies operating within the space. Coinbase, as a leading crypto exchange, presents an opportunity for investors seeking exposure to the cryptocurrency sector without the risks associated with digital assets themselves. While the NPS faced disapproval from the country’s national assembly for including a digital assets company in its U.S. stock portfolio, the investment has proven to be a wise decision.
Coinbase’s shares have experienced a consistent upward trend throughout the year, contributing to the impressive profit earned by the NPS. Local media reports suggest that the average purchase price per share for the fund was $70.5. However, with the recent closing price of $98.15, the NPS stands to gain approximately 40% profit within just a single quarter. This success is significant not only for the fund but also for the National Pension Service itself, ranked as the world’s third-largest pension fund, with assets surpassing $800 billion.
Data from Tradingview reveals that Coinbase shares have performed exceptionally well compared to other crypto-related stocks. Over the last six months, Coinbase shares have increased by an impressive 62%, and the year-to-date metrics show a remarkable 168% growth. This positive trend can be attributed to the overall performance of the crypto space, with digital assets like Bitcoin, Ethereum, and Solana recording gains exceeding 100% in the past year.
Coinbase’s growth as a cryptocurrency exchange has been substantial, further contributing to its stock’s positive performance. The company received licensing approval from Bermuda to establish an international exchange and extended its offering to non-U.S. retail customers by introducing perpetual futures trading. Additionally, Coinbase has obtained licenses in several European countries, including the Netherlands, Spain, Ireland, and Italy, facilitating its expansion outside of the United States.
The National Pension Service of South Korea’s investment in Coinbase stocks has proven to be highly profitable. By taking advantage of the upward trajectory of Coinbase shares, the fund experienced a remarkable 40% profit within just a single quarter. This success underscores the importance of diversification, with institutional investors like the NPS leveraging stocks of companies operating in the cryptocurrency industry to gain exposure to the emerging asset class. As Coinbase continues to expand its operations and secure licenses globally, the future prospects for its stock remain promising.