The German pension fund for doctors in the state of North Rhine-Westphalia, Nordrheinische Ärzteversorgung (NAEV), has made its first significant move into the crypto space after a two-year testing period. The total allocation remains below 0.5% of the fund’s overall assets.

Testing two strategies under strict limits

Over the past few years, the first-pillar pension fund explored cryptocurrency exposure by testing two investment strategies, initially allocating up to 0.1% of total assets, or approximately €17 million. Following the conclusion of the testing phase, the allocation increased to no more than 0.5%, equivalent to around €85 million.

“The second strategy is more of a niche equity fund, investing approximately 80% in crypto and Blockchain-related companies and up to 25% in cryptocurrencies,” said Bernd Franken, NAEV’s chief investment officer.

The investments were executed through exchange-traded products (ETPs) and closely monitored throughout the testing phase. Despite periods of extreme volatility, performance ranged between 100% and 300%, according to Franken.

Cryptocurrencies seen as speculation, not value storage

“At the end of the testing period, we completely divested the first strategy because, similarly to gold, we saw it as pure price speculation. Cryptocurrencies have no intrinsic value to justify their price movements,” Franken explained.

NAEV ultimately decided to retain the equity-focused strategy. Franken argued that the strong performance track record of crypto and Blockchain companies provides a more solid foundation for long-term price development. Exposure to listed firms also allows for more familiar valuation metrics and risk monitoring.

Even so, the allocation remains modest. Crypto-linked holdings are clearly categorized as satellite investments rather than a core component of the portfolio.

Franken emphasized that NAEV does not view cryptocurrencies as a long-term store of value comparable to sovereign bonds or real estate. However, within a diversified portfolio, carefully sized exposure through regulated instruments may enhance return potential. This approach reflects a broader trend among institutional investors cautiously experimenting with crypto strategies.

Global context: cautious steps by pension systems

Regulatory attitudes toward digital assets in retirement savings are also evolving globally. In August, the current US administration issued an executive order allowing 401(k) and other defined contribution retirement plans to invest in digital assets.

In the UK, a pension fund last year allocated 3% of its assets, or £1.5 million, to bitcoin, following advice from consultancy Cartwright.

However, caution remains dominant in Germany. Clemens Schuerhoff, managing director at Kommalpha, noted that German pension investors largely view cryptocurrencies as volatile and speculative, with inconsistent risk-adjusted returns. As a result, most institutions continue to stay on the sidelines.

Sources:

https://www.ipe.com/news/german-doctors-pension-fund-makes-first-foray-into-crypto/10134269.article

https://en.cryptonomist.ch/2025/12/17/german-pension-fund-crypto/