# Bitcoin in your pension



## LDFerguson

Aviva have advised that they can now accept investments in the following Bitcoin-tracking ETFs in their pension products, via their Self-Directed Investment Options (SDIO) in conjunction with Cantor Fitzgerald. 



[broken link removed]

I'm posting this to share information and not as a recommendation. 

Regards,

Liam
www.ferga.com


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## SGWidow

Thanks Liam,

You know Brendan will want to know whether Aviva is offering a Tulip tracking fund also!

On a serious note, what is the risk rating of such an "investment"?


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## LDFerguson

SGWidow said:


> On a serious note, what is the risk rating of such an "investment"?



Because these can only be accessed through the self-directed option, Aviva don't have to rate the risk as they're only providing the vehicle by which you can buy the ETFs.  In the same way, you could also buy individual shares and Aviva wouldn't provide a risk rating for them.  

By my own calculations, using the industry-standard risk rating scale of 1 to 7, I'd calculate them to be about a 73.


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## RedOnion

LDFerguson said:


> By my own calculations, using the industry-standard risk rating scale of 1 to 7, I'd calculate them to be about a 73


Surprisingly, ETC only rated it 6 out of 7 in their KID. I'd love to see the calculations!


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## LDFerguson

RedOnion said:


> Surprisingly, ETC only rated it 6 out of 7 in their KID. I'd love to see the calculations!



I didn't look at that.  The current risk rating model uses volatility as a proxy for risk.  In my opinion, that's a flawed model.  An investment that goes down steadily at a uniform pace would be rated as low-risk.  But that's a debate for another day and it's still probably a better system than the older, very basic "Low, Medium or High" choices.  I'd guess that the ETC ETF hasn't been wildly volatile in the period measured for the risk rating.  If that's what is is, then it's a very real example of the perils of using volatility alone as a measure of risk.


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## Duke of Marmalade

I see Niall Brady has covered this item in the Sunday Times.  Surely there are some constraints on what self directed pensions are invested in. For example can they bet on the horses?  I doubt they can which suggests that there is some regulatory consumer protection powers available.  If so, it is behoven on the Central Bank to intervene and ban this facility outright - it is every bit as unsuitable in a pension vehicle as betting on the horses. Professor Roubini has made it clear that crypto is not an asset never mind an nvestment.  For Aviva and CF to say they are not endorsing the facility and for Central Bank to say cryptos are unsuitable for most consumers is a complete kop out.  It reminds me of when the CB said Geared Trackers were unsuitable for most consumers.  That resulted in a spike in sales of those dastardly products as a few companies made it a marketing point playing to the vanity of customers by suggesting to them that they were that elite minority for whom they were suitable.


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## tecate

Duke of Marmalade said:


> Surely there are some constraints on what self directed pensions are invested in.


That's right Dukey - we shouldn't let people think for themselves or take responsibility for themselves.



Duke of Marmalade said:


> For example can they bet on the horses?


Interesting that you should bring that up Dukey - because between 2018 and 2020 many banks prevented people from buying cryptocurrency via bank issued credit/debit cards yet it was totally fine to gamble on horses/dogs and whatever else and pay with said cards.
Although upon reflection, I'm probably not taking cognisance of just how risk averse you are, your Dukeness. Clearly, you're not a gambler!! Either that or deep down, you have no strength of conviction in your claims.



Duke of Marmalade said:


> If so, it is behoven on the Central Bank to intervene and ban this facility outright - it is every bit as unsuitable in a pension vehicle as betting on the horses.


I disagree entirely. It just needs to be position-sized correctly. There are plenty in the US who have included Grayscale (GBTC) within their IRAs and they've reaped the benefits.



Duke of Marmalade said:


> Professor Roubini has made it clear that crypto is not an asset never mind and investment.


And yet in a recent interview, he conceded that it was a store of value - an attempted u-turn. To say that the guy is bitter and twisted on the subject is a bit of an understatement.
Here's the former Wyoming State Treasurer and Senator-elect Cynthia Lummis outlining the relevance of bitcoin in this context -> LINK.


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## Duke of Marmalade

tecate said:


> That's right Dukey - we shouldn't let people think for themselves or take responsibility for themselves.


Folk can spend their own money as they please as long as it is not criminal. 
But a significant portion of a pension fund is a loan from the taxpayer which is expected to be repaid when the pension is drawn down.  Taxpayers’ money should not be sucked into a Ponzi scheme.  These loans are for maybe 30 years or more. Can anybody doubt that bitcoin will have cryptoed through the tulips by then?


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## tecate

Duke of Marmalade said:


> Taxpayers’ money should nor be sucked into a Ponzi scheme.


Any claims that bitcoin is a Ponzi Scheme is laughable. Anything that could be classed as a Ponzi has been carefully orchestrated as a fraud. If that's your claim, please point out the individual or individuals who have masterminded this fraud? Secondly, point me towards a Ponzi which has been run through multiple peaks and troughs. You won't be able to as there's no such example.



Duke of Marmalade said:


> These loans are for maybe 30 years or more. Can anybody doubt that bitcoin will have cryptoed through the tulips by then?


You're one of the few holdouts in terms of attempts to claim that bitcoin equals Tulipmania. They're in no way comparable given that tulips possess none of the internationally accepted characteristics of a store of value or money whereas bitcoin on the other hand does.
Whilst you can't be objective enough to accept the possibility that bitcoin will continue to be successful, I'm on record as accepting that it could potentially fail. However, in the case of pensions or anything else for that matter, I've long since advocated for the inclusion of no more than a few percent within an overall portfolio. To my mind, it's now irresponsible to not gain that limited exposure to an asset that presents with asymmetric risk.
Here's a popular culture take on the type of practice you're trying to shine a light on, though.


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## Duke of Marmalade

tecate said:


> Any claims that bitcoin is a Ponzi Scheme is laughable. Anything that could be classed as a Ponzi has been carefully orchestrated as a fraud. If that's your claim, please point out the individual or individuals who have masterminded this fraud? Secondly, point me towards a Ponzi which has been run through multiple peaks and troughs. You won't be able to as there's no such example.
> 
> You're one of the few holdouts in terms of attempts to claim that bitcoin equals Tulipmania. They're in no way comparable given that tulips possess none of the internationally accepted characteristics of a store of value or money whereas bitcoin on the other hand does.
> Whilst you can't be objective enough to accept the possibility that bitcoin will continue to be successful, I'm on record as accepting that it could potentially fail. However, in the case of pensions or anything else for that matter, I've long since advocated for the inclusion of no more than a few percent within an overall portfolio. To my mind, it's now irresponsible to not gain that limited exposure to an asset that presents with asymmetric risk.
> Here's a popular culture take on the type of practice you're trying to shine a light on, though.


Typically you dismiss my metaphors by pointing out their lack of 100% accuracy, no metaphor is 100% accurate.  I don't challenge your description of "digital gold" by pointing out that you can't make necklaces out of bitcoin.
When I pass on the assertions of learned observers that crypto is a Ponzi scheme, I am not suggesting it was started by an Italian gentleman.  You know what is meant - when it blows up it will be the last suckers in who will be badly burnt. Along the way the manipulating whales will have performed a spectacular fraud.
My reference to Tulipmania is not to suggest that bitcoin is a bulbous flowering plant.
When crypto does go to zero we will have a unique episode in the human history of tulip like mania, but one thing will set it apart.
Nobody ever doubted that tulips had some value.  Nobody doubted that pre Wall Street crash stocks had some value.  Nobody doubted that dot.com stocks had some value.  The mania was in completely overstating the respective values.  With crypto it seems to me that the great majority of informed observers believe it has *zero *value.  Poor @WolfeTone really struggled to come up with a economist who thought otherwise.


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## WolfeTone

Duke of Marmalade said:


> Poor @WolfeTone really struggled to come up with a economist who thought otherwise.



Struggled with a "mainstream/household name" or Nobel economist for sure, but I qualified that stating that I am only familiar with a dozen or so such economists, hardly a confirmation of the BOHA theory is it?
I also conditioned that I would be somewhat reluctant to engage in the economist authoritative view as I suspect only such economists that support the BOHA view will be recognised as having an authoritative view by yourself?

I introduced Veldes because what he wrote was back in 2013, when bitcoin price was not resonating much in popular culture.  Roubini and Krugman only seem to get involved in the bitcoin sphere when the price starts to turn their heads. This indicates, to me anyway, a flaw in their position. Unlike Veldes, who concentrated mostly on the technology, Roubini and Krugman cannot see beyond the $ amount of bitcoin.

Here is another economist Dr Saifedean Ammous Assistant Professor of Economics at Lebanese Amercian University. He wrote a book called "The Bitcoin Standard". How would you consider his views?

So I get the notion that economists have insights and knowledge that are useful, but what I don't get is that one economist is more authoritative on the subject of bitcoin over another by virture of their standing in their respective profession. What I look for is what they have to say and then weigh up the differing opinions and make an informed judgement.

Having read Veldes and Ammous, and also Roubini and Krugman, there is no doubt in my mind which economists are speaking authoritively with greater insight and knowledge on the subject of bitcoin, and which economists are merely reacting to market prices alone.


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## tecate

Duke of Marmalade said:


> I don't challenge your description of "digital gold" by pointing out that you can't make necklaces out of bitcoin.


For your sake I hope not as the clue is in the 'digital' part.



Duke of Marmalade said:


> When I pass on the assertions of learned observers that crypto is a Ponzi scheme, I am not suggesting it was started by an Italian gentleman.


I don't give a fiddlers about your celebrity economist. He's become bitter and twisted on the subject. It has become 100% obvious that he lacks any objectivity on the subject. In one of those interviews that were linked in the other thread, he dismisses decentralised blockchain in its entirety. The days of people accepting the pronouncements of some celebrity high priest economist are long gone.  They'll have to justify their takes - like the rest of us. If you apply first principles, you couldn't possibly agree with your new found friend on the ponzi scheme jibe.



Duke of Marmalade said:


> You know what is meant - when it blows up it will be the last suckers in who will be badly burnt. Along the way the manipulating whales will have performed a spectacular fraud.


I know precisely what you meant Duke - you use totally inaccurate disparaging phraseology in an attempt to mislead and tar and feather. Bitcoin is not a ponzi scheme and anyone who says that it is is a liar.



Duke of Marmalade said:


> My reference to Tulipmania is not to suggest that bitcoin is a bulbous flowering plant.


Your reference to Tulipmania is precisely that. When called on it, you know that you can't defend the point. And again, your celebrity economist knows better - but he lacks the objectivity to not use such a term.



Duke of Marmalade said:


> When crypto does go to zero we will have a unique episode in the human history of tulip like mania, but one thing will set it apart.


That's an IF  - not a when. And IF it does, it has nothing whatsoever to do with Tulipmania. If you really believe that it does, then back that assertion up. Tulips had NONE of the characteristics of a store of value or money back then. Bitcoin has many of those characteristics.



Duke of Marmalade said:


> Nobody doubted that pre Wall Street crash stocks had some value.


What of it? Wall Street still exists, right? What you're claiming is entirely different.  You're claiming that bitcoin goes away - permanently.  And whilst we're on the subject, if a stock market crash is a thing for you, WHY do you not get as animated about that? Where was your contempt for the stock market crash that happened in March of last year? Where is your contempt for the fact that Wall Street makes NO sense right now - as it moves up when the real economy goes into the crapper? Where is your contempt for the fact that a conventional market crash is inevitable - it's just a question of when that will happen?



Duke of Marmalade said:


> Nobody doubted that dot.com stocks had some value.


Again, you're claiming that bitcoin goes away completely. That's entirely different to dot.com - out of which by the way a whole wave of innovation emerged.



Duke of Marmalade said:


> With crypto it seems to me that the great majority of informed observers believe it has *zero *value.


 And maybe it's time to rely on first principles rather than some gravy train celebrity economist patroned by a centralised system that is diametrically opposed to decentralised cryptocurrency.



Duke of Marmalade said:


> Poor @WolfeTone really struggled to come up with a economist who thought otherwise.


Yeah, on that Duke...you've gone on a couple of times about one experts view trumping another. You want me to take Fax Machine Guy's word for it?  No thanks!


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## Duke of Marmalade

Oh dear.  It has all been said before.  Looks like this is another thread to bite the dust which is a pity as it was about the rather serious subject of pension funds investing in crypto.


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## tecate

Duke of Marmalade said:


> Oh dear.  It has all been said before.  Looks like this is another thread to bite the dust which is a pity as it was about the rather serious subject of pension funds investing in crypto.


Yes, you have brought all these unfounded claims up before. I guess  i could have responded with a [broken link removed] of your view on bitcoin instead.


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## SGWidow

I'm not a fan of the nannying of what is/isn't allowable for one's retirement savings.

Also, studies repeatedly show that folk are more likely to take too little, rather than too much, risk with their pension savings.

Whether it's still true is debatable but, without doubt, for many years, Bitcoin presented, as Tecate very nicely described it, positive asymmetric risk.

*The very best place to hold assets with massive growth potential is within a CGT sheltered environment.*

Imagine having this conversation a year ago. If I had had the option, I'd have much preferred to have had a few bob (percentage) of my fund in BTC rather than long-dated government bonds.


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## Duke of Marmalade

SGWidow said:


> Whether it's still true is debatable but, without doubt, for many years, Bitcoin presented, as Tecate very nicely described it, positive asymmetric risk.


Explain please.  If it means that btc downside is currently only $30k whilst its upside has no numerical bounds, that is true of any share price.
If it means that the chances of it going up $10k are greater than its chances of falling $10k, that is purely subjective.

_Edited to correct misinterpretation of tax position_


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## NoRegretsCoyote

Naïve question: Can I now direct 100% of my tax-relieved pension savings into an index which tracks bitcoin?


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## Sarenco

SGWidow said:


> Also, studies repeatedly show that folk are more likely to take too little, rather than too much, risk with their pension savings.


Could you provide links to any of these studies?


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## SGWidow

Duke of Marmalade said:


> As I understand it, the Irish Revenue agree with Professor Roubini that btc is not an asset and therefore it is not subject to CGT in any environment - rather like a bet on the horses.



Absolute nonsense.


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## WolfeTone

Duke of Marmalade said:


> the Irish Revenue agree with Professor Roubini that btc is not an asset and therefore it is not subject to CGT in any environment - rather like a bet on the horses.




Taxation of cryptocurrency transactions


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## Duke of Marmalade

SGWidow said:


> Absolute nonsense.


Should have known that you are a reincarnation of a Duke troll.  I note  you didn't answer my question.  Don't bother, I'm not interested in anything you have to offer.


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## Duke of Marmalade

WolfeTone said:


> Taxation of cryptocurrency transactions


Ooops!  Got that one wrong.  Thanks for the civilised correction.


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## LDFerguson

NoRegretsCoyote said:


> Naïve question: Can I now direct 100% of my tax-relieved pension savings into an index which tracks bitcoin?



I'll refrain from going anywhere near the rabbit-hole of discussing whether or not you *should* as I suspect that this is a hypothetical question.  

But the answer to the direct question is Yes.


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## NoRegretsCoyote

LDFerguson said:


> I'll refrain from going anywhere near the rabbit-hole of discussing whether or not you *should*


I know the answer to that  

Otherwise thanks for the answer to the theoretical question.


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## Gordon Gekko

Thankfully IORPS II will put a stop to nonsensical ideas like ‘investing’ all of one’s pension fund in something like Bitcoin. It mandates diversification and investment via regulated markets.

The EU don’t want people making concentrated punts or investing in unregulated markets.

And they’re right, because with the tax relief, this isn’t just the individual’s money.

By all means, buy the ‘Horse Manure Index’ in a personal capacity, but don’t expect to be able to do it through a tax exempt regulated structure like a pension.


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## Duke of Marmalade

@Gordon Gekko Exactly


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## SGWidow

Gordon Gekko said:


> Thankfully IORPS II will put a stop to nonsensical ideas like ‘investing’ all of one’s pension fund in something like Bitcoin. It mandates diversification and investment via regulated markets.



But nobody is talking about placing all one's pension in Bitcoin - at least not on this thread.


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## LDFerguson

SGWidow said:


> But nobody is talking about placing all one's pension in Bitcoin - at least not on this thread.



Thankfully true, but I think the point is that at present there's no regulation in place stopping a person from doing so.  As Gordon Gekko says, IORPS II will change this, but the implementation of this in Ireland has been delayed for other reasons and I don't know when it will be implemented.


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## Gordon Gekko

SGWidow said:


> But nobody is talking about placing all one's pension in Bitcoin - at least not on this thread.



Eh, yes they are, you should re-read the thread. Post #17 for example (“can I put all of my pension in Bitcoin?”). Post #7 opening up a debate about whether people should be able to control their pension fund’s investment approach without constraint.


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## SGWidow

You're having a laugh.

Post 17 was an enquiry about the cap - not a recommendation

Tecate is the poster in #7. I have seen a few times now where he has said don't put all your eggs into the Bitcoin omelette.


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## Gordon Gekko

SGWidow said:


> You're having a laugh.
> 
> Post 17 was an enquiry about the cap - not a recommendation



SGWidow: “But nobody is talking about placing all one's pension in Bitcoin - at least not on this thread”

Post #17: “Can I now direct 100% of my tax-relieved pension savings into an index which tracks Bitcoin”

Blessed are those who have eyes to see...


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## SGWidow

Gordon Gekko said:


> Post #17: “naïve question: Can I now direct 100% of my tax-relieved pension savings into an index which tracks Bitcoin”



I think the clue is in the word question. Hopefully, NRC will confirm his meaning/intentions. I certainly read them, as I have described.


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## tecate

SGWidow said:


> Tecate is the poster in #7. I have seen a few times now where he has said don't put all your eggs into the Bitcoin omelette.


Precisely.  Take no notice - there's more salt to be found here than at a Saxa salt packing plant.

Here's one such post from May 2020 when I suggested an allocation of no more than 5% on the basis of that asymmetric risk. There are others.
The "without constraint" claim is a work of fiction. 

In December, US Life Insurance Company, Mass Mutual . The first of many.


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