Speculation in cryptocurrency trading is the primary reason preventing the Qatari sovereign wealth fund from investing in one of the most volatile asset classes in the world. The attractiveness of Bitcoin and other cryptocurrencies is declining for investment institutions like the Qatar Investment Authority, which is one of the largest sovereign wealth funds globally, with assets estimated at more than $360 billion, according to the Global SWF. Mansoor bin Ibrahim Al Mahmoud, CEO of the Qatar Investment Authority, stated during the Qatar Economic Forum that cryptocurrencies "need a bit of maturity before we can determine our vision regarding investments in this field."
There are doubts concerning the future outlook on Bitcoin and other cryptocurrencies amid severe downward volatility. Bitcoin has lost more than 50% of its value compared to its peak in mid-April, when it was nearly $65,000. The cryptocurrency began this year at levels close to $29,000, having quadrupled in 2020. Bitcoin prices rebounded again last Wednesday after investors faced challenges with its drop below $30,000.
European Assets
Al Mahmoud noted that the Qatar Investment Authority will continue to focus on enhancing its investments in Asia and the United States, rather than in cryptocurrencies; it aims to redistribute its portfolio investments, which are concentrated in European assets. He also mentioned that the fund will expand into real estate investment, focusing on commercial warehouses in light of the impacts of the COVID-19 pandemic on the retail and office property sectors.
Al Mahmoud added, "We are focusing on the real estate sector by investing in storage operations to support e-commerce businesses. This is what we are working on in preparation for the right time."
The Qatar Investment Authority was established in 2005 to invest the high returns from gas exports into assets to secure future income. The Authority holds stakes in several major companies worldwide, including the London Stock Exchange, Volkswagen, and Glencore.
The fund aims to establish specific criteria for its investments regarding environmental sustainability and corporate governance formally this year, according to Al Mahmoud. He stated, "We have invested in initiatives and projects related to environmental, social, and corporate governance standards for some time, and these investments will be institutionalized this year by incorporating these standards into our official investment framework."
The Ministry of Commerce and Industry in Qatar, the Qatari Investment Promotion Agency, and the Qatar Media City are the organizing entities for the Qatar Economic Forum, supported by Bloomberg.
