EPF contributors turn to bitcoin

Bitcoin price has risen 594% compared to a year ago, outperformed other traditional assets including gold

by AFIQ AZIZ / pic by BLOOMBERG

THE uptrend and rally of bitcoin last year has driven some Employee Provident Fund (EPF) contributors to use their retirement savings to invest in digital coin assets.

Some cryptocurrency traders, who are using platform local exchanges licensed by the Securities Commission Malaysia to buy and sell bitcoin, told The Malaysian Reserve that the economic uncertainties had left them with no choice, but to invest in the new asset class.

The price of bitcoin — the most popular and leading cryptocurrency by market capitalisation — has risen by 594% compared to a year ago outperformed other traditional assets including gold.

Meanwhile, the second-largest digital coin ethereum — with 12% market dominance — reported more than 800% surge in price compared to March 2020, revealed data collected by CoinGecko.

A former government servant who wished to be known as Moktar, whose contract was terminated last year, started to invest in bitcoin upon the introduction of EPF’s i-Lestari scheme.

Moktar said he used all of the RM500 credited to his account from EPF to one of the licensed DAX and generated hefty income last December when bitcoin passed its previous high of US$20,000 (RM82,500).

“Since I have no income, I had to learn, read and get to know what I am investing in and I believe bitcoin has its store value which I consider as digital gold.

“When I first learned about this (investment), I lost quite a lot, but when you put your money, you need to study about these assets, then you learn of the movement and its volatility. So, I do not mind using my EPF savings for this,” the 45-year-old said.

Up to February, a total of RM18.1 billion has been withdrawn by 5.16 million members under the i-Lestari facility, which was among the immediate measures introduced by the fund amid the challenging situation in 2020 due to the Covid-19 pandemic.

“I have also withdrawn my i-Sinar, which again would be used into cryptocurrency investment as I believe it will shoot a new high again this year — the same trend we saw in December 2017 when it shot US$20,000,” Moktar said, stating that the trend was driven by bitcoin halving protocol which happens once in four years.

According to Bloomberg, as of yesterday, bitcoin was trading at about US$60,000 in Asia, after topping out at US$61,742 over the weekend.

An executive at a private university in Kuala Lumpur, Haina, 34, also opted to invest the RM500 i-Lestari into bitcoin as an additional income.

Haina had also received her first RM5,000 i-Sinar payment from EPF and plans to invest in cryptocurrencies.

An industry observer warned the public to conduct a self-risk assessment in dealing with investments with a volatile portfolio.

“The rule of thumb is to split your investment by 80-20, with 80% of it being on less volatile assets, while 20% is high risk, so you would not be severely affected when the investment went south too much.”


Read our previous report here

Bitcoin Falls Back After Weekend Rally to Record Above $61,000