South Korean Pension Fund Invests $34 Million in MicroStrategy Stock

South Korea's National Pension Service (NPS) has recently acquired $34 million worth of shares in MicroStrategy, a prominent business intelligence firm known for its substantial holdings in Bitcoin.

Acquisition Details

As per a recent filing with the Securities and Exchange Commission (SEC), the NPS purchased 24,500 shares of MicroStrategy during the second quarter. The average price per share was $1,377, resulting in a total of approximately 245,000 shares post MicroStrategy's 10-for-1 stock split earlier this month.

About the National Pension Service

As South Korea's primary public pension fund, the NPS stands as the largest institutional investor in the country, managing assets exceeding $777 billion. This $34 million investment in MicroStrategy can be viewed as an indirect endorsement of Bitcoin by the fund.

MicroStrategy's Bitcoin Holdings

MicroStrategy boasts the most significant Bitcoin reserves among publicly traded companies, with holdings surpassing 226,500 BTC valued at around $13.2 billion. The firm opted to take on debt to amass a substantial portion of its Bitcoin holdings, effectively making its stock a leveraged investment in Bitcoin.

Increasing Institutional Interest

The NPS adds to a growing roster of pension and sovereign wealth funds that are gaining exposure to Bitcoin through investments in MicroStrategy. Notable entities such as Norway's central bank and the Swiss National Bank have also publicly disclosed their ownership of MicroStrategy shares.

Market Performance and Investor Confidence

MicroStrategy's stock price has experienced significant growth this year, nearly doubling as more institutional investors express confidence in the company's Bitcoin-centric strategy. Defiance ETFs even introduced a leveraged ETF designed to target 175% of MicroStrategy's daily stock movements.

Validation of Bitcoin as a Corporate Treasury Asset

The increasing participation of major pension funds worldwide in MicroStrategy shares serves as a validation of Bitcoin's evolution as a preferred treasury asset for public corporations.

Frequently Asked Questions

What are the pros and disadvantages of a gold IRA

An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. But, this type of investment comes with its own set of disadvantages.

You may lose all your accumulated savings if you take too much out of your IRA. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. A penalty fee will be charged if you decide to withdraw funds.

You will also need to pay fees for managing your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.

You can purchase insurance if you want to keep your money out of a bank. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. You might be required to buy insurance that covers losses up to $500,000.

If you choose to have a gold IRA you will need to establish how much gold to use. Some providers limit the amount of gold that you are allowed to own. Some providers allow you to choose your weight.

Also, you will need to decide if you want to buy physical gold futures contracts or physical gold. Futures contracts for gold are less expensive than physical gold. Futures contracts, however, allow for greater flexibility in buying gold. They let you set up a contract that has a specific expiration.

You'll also need to decide what kind of insurance coverage you want. The standard policy doesn't include theft protection or loss due to fire, flood, or earthquake. However, it does cover damage caused by natural disasters. Additional coverage may be necessary if you reside in high-risk areas.

Apart from insurance, you should consider the costs of storing your precious metals. Insurance won't cover storage costs. Banks charge between $25 and $40 per month for safekeeping.

If you decide to open a gold IRA, you must first contact a qualified custodian. A custodian is responsible for keeping track of your investments. They also ensure that you adhere to federal regulations. Custodians don't have the right to sell assets. Instead, they must hold them as long as you request.

Once you've chosen the best type of IRA for you, you need to fill in paperwork describing your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. Also, you should specify how much each month you plan to invest.

Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. The company will review your application and send you a confirmation letter.

If you are thinking of opening a gold IRA for retirement, a financial professional is a great idea. Financial planners have extensive knowledge in investing and can help determine the best type of IRA to suit your needs. You can also reduce your insurance costs by working with them to find lower-cost alternatives.

How do you withdraw from an IRA that holds precious metals?

First, determine if you would like to withdraw money directly from an IRA. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.

You should open a taxable brokerage account if you're willing to pay a penalty if you withdraw early. This option will require you to pay taxes on the amount that you withdraw.

Next, calculate how much money your IRA will allow you to withdraw. This calculation is affected by many factors, such as the age at which you withdraw the money, the amount of time the account has been owned, and whether your plans to continue contributing to your retirement fund.

Once you know what percentage of your total savings you'd like to convert into cash, you'll need to determine which type of IRA you want to use. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.

After these calculations have been completed, you will need to open a brokerage bank account. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. It is better to open an account with a debit than a creditcard in order to avoid any unnecessary fees.

When it comes time to withdraw your precious metal IRA funds, you will need a safe location where you can keep your coins. Some storage facilities can accept bullion bar, while others require you buy individual coins. You will need to weigh each one before making a decision.

Bullion bars are easier to store than individual coins. However, you'll need to count every coin individually. However, individual coins can be stored to make it easy to track their value.

Some people like to keep their coins in vaults. Others prefer to place them in safe deposit boxes. No matter what method you use, it is important to keep your bullion safe so that you can reap its benefits for many more years.

What are the benefits to having a gold IRA

It is best to put your retirement money in an Individual Retirement Account (IRA). It is tax-deferred until it's withdrawn. You control how much you take each year. There are many types and types of IRAs. Some are better suited for college students. Some are for investors who seek higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. However, once they begin withdrawing funds, these earnings are not taxed again. This type of account might be a good choice if your goal is to retire early.

The gold IRA allows you to invest in different asset classes, which is similar to other IRAs. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.

An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. This eliminates the need to constantly make deposits. To avoid missing a payment, direct debits can be set up.

Finally, the gold investment is among the most reliable. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even during economic turmoil the gold price tends to remain fairly stable. Gold is a good option for protecting your savings from inflation.

How Does Gold Perform as an Investment?

The price of gold fluctuates based on supply and demand. Interest rates are also a factor.

Due to the limited supply of gold, prices for gold are highly volatile. Additionally, physical gold can be volatile because it must be stored somewhere.

Statistics

You can only purchase gold bars at least 99.5% purity. (forbes.com)
Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
(Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)

External Links

How To

The History of Gold as an Asset

From the beginning of history, gold was a popular currency. It was widely accepted around the world and enjoyed its purity, divisibility and uniformity. Due to its value, it was also internationally traded. Different weights and measurements existed around the world, however, because there were not international standards to measure gold. One pound sterling, for example, was equivalent in England to 24 carats, and one livre tournois, in France, to 25 carats. A mark, on the other hand, was equivalent in Germany to 28 carats.

In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This caused a drop in foreign currency demand which resulted in an increase of their prices. In this period, large amounts of gold coin were minted by the United States, which caused the gold price to drop. Because the U.S. government had too much money coming into circulation, they needed to find a way to pay off some debt. They decided to return some of the gold they had left to Europe.

Because most European countries did not trust the U.S. dollar, they started accepting gold as payment. However, many European nations stopped using gold to pay after World War I and started using paper currency instead. The value of gold has significantly increased since then. Today, although the price fluctuates, gold remains one of the safest investments you can make.

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By: Vivek Sen
Title: South Korean Pension Fund Invests $34 Million in MicroStrategy Stock
Sourced From: bitcoinmagazine.com/business/south-korean-pension-fund-buys-34-million-in-microstrategy-shares
Published Date: Fri, 16 Aug 2024 09:28:13 GMT