British pension fund company Cartwright has announced the first-ever Bitcoin placement of a defined benefit (DB) pension plan portfolio, Corporate Advisor reports.

A DB fund is a type of pension scheme in which the expected payout is determined by a fixed formula, as opposed to a funded fund, which is used in other schemes.

Cartwright said that between 2% and 3% of the scheme's assets will be invested in Bitcoin - a lot, actually.

Meanwhile, across the pond in the US, a Michigan public pension fund has become the first US investor in an Ethereum ETF , investing a total of $11 million in Grayscale's Ethereum Trust and Ethereum Mini Trust.

Pension fund moves into Bitcoin

Glenn Cameron, head of digital assets at Cartwright, told Corporate Advisor that the decision to allocate assets to Bitcoin was made after a lengthy consultation process with the scheme's trustees, which weighed up ESG (environmental, social and governance), investment strategy and security considerations. Outlining the investment case for the scheme's Bitcoin holdings, Cameron said:

"The logic is that it's an asymmetric investment opportunity. If you put 2% in, the most you can lose is 2% if it goes to zero. But the upside is potentially significant. If you look at Bitcoin's correlations with 14 other asset classes, the 60-day correlation is all around zero. Investors need certain investment horizons and these need to be aligned with their risk appetite."

Notably, the scheme will invest in Bitcoin directly, rather than through an ETF. Bitcoin will be secured through an agreement in which the private key to the Bitcoin vault is split and stored by five separate, independent entities.

Cameron believes that Bitcoin is entering a twenty-year growth cycle, during which the price of the cryptocurrency will continue to rise due to its increasing scarcity.

In addition to the defined benefit scheme, Cartwright plans to launch other Bitcoin-based pension products, the first of which will be a workplace Bitcoin savings offering known as Cartwright Bitcoin Employee Benefits, which will allow employers to deposit Bitcoin directly into their employees’ wallets.

The firm is also creating a product that allows unlisted companies to offer Bitcoin to employees, similar to the restricted shares available to employees of listed companies – Cartwright calls these “restricted Bitcoin units.”

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