AMP crypto play backed by Aussie exchange

AMP’s unprecedented yet “modest” plunge into cryptocurrency investing has received the backing of a leading Australian crypto exchange, with the move hailed as “a bold step in the right direction”.

BTC Markets chief executive Caroline Bowler welcomed AMP’s first tentative steps into the crypto space, strongly backing the firm’s strategic approach.

AMP senior portfolio manager Steve Flegg revealed in a LinkedIn post yesterday the AMP super portfolios’ “modest allocation to Bitcoin”, with exposure limited to 0.05%.

Flegg acknowledged that while crypto investments remain “risky, new and not yet fully proven”, its substantial size and continued potential for growth remains “too great to continue to ignore”.

Bowler hailed AMP’s balanced – “cautious, yet innovative” – approach as the right one for a major super fund.

“As the post rightly points out, the crypto market has grown too significant to ignore. It’s not just about the buzz; it’s about the real potential Bitcoin holds as part of a diversified investment strategy,” she said.

“By acknowledging the volatility and managing the exposure to only 0.05% of their assets, they’re not just dabbling; they’re taking a measured step into digital assets.

“This cautious, yet innovative, approach ensures that super members can benefit from Bitcoin’s upward trends while being shielded from its more notorious swings.”

Bowler also acknowledged AMP’s move to integrate Bitcoin investments into its Dynamic Asset Allocation program, which enables added flexibility to adjust the asset class mix to suit market conditions.

This, she said, “shows a forward-thinking mindset that aligns perfectly with the transformative changes we’ve seen in the financial industry this year”.

Cryptocurrencies’ – and particularly Bitcoin’s – price volatility is well recognised by investors.

In the last month alone, the Bitcoin price has risen 17.1%, with a gain of 54.7% over the last six months, reaching $AU157,121 per coin (as at 13 December 2024).

Yet investors have also borne spectacular price dips since Bitcoin’s first minting in 2009. Among the most recent slides include in November 2022, when the coin lost a quarter of its value following the collapse of global crypto exchange FTX; between April and May 2021 the coin lost 53% of its value, with $1 trillion wiped off the global crypto market in a single week.

While appreciating the scepticism around crypto, Bowler said the emerging asset class offers significant potential over the long term.

“[What’s] often overlooked is Bitcoin’s role in the digital asset industry and its potential for significant long-term growth. The digital asset class is still in its infancy, much like the internet was in the ’90s. Those who didn’t see the value in tech stocks back then missed out on a revolution.”

The clear interest shown by Australians in crypto, she said, suggests a market “ripe for exploration”.

“It’s not just about chasing gains; it’s about recognising a new asset class that’s here to stay and understanding how it fits into a broader, diversified portfolio.”