Taiwan's labor insurance bankruptcy warning is sounding loudly. Can embracing BTC achieve a turnaround?

According to the latest statistics from the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan, as of the end of June this year, both the central and local governments have reached a new high in hidden debts, highlighting the heavy burden on the next generation and bringing up the topic of labor insurance bankruptcy... If the government embraces BTC, can it bring a turning point? (Summary: TSMC's US factory has made a major breakthrough: chip yield surpasses Taiwan, and prices for sub-5nm may soar again next year) (Background: Taiwan's 'eighth wave of housing market tightening' is coming! Experts predict that housing prices will definitely explode, falling by 5% each year) The Ministry of Labor in Taiwan conducts financial calculations for labor insurance every three years, and according to the actuarial report for 2021, the estimated hidden debt (future payment obligations) of labor insurance in the next 50 years has expanded to 10.29 trillion yuan. After the government allocated 72 billion yuan to extend the bankruptcy deadline of the labor insurance fund to 2028. The central and local governments have reached a new high in hidden debts. According to an article in the Economic Daily this week, the Labor Insurance Bureau has outsourced actuarial calculations and is scheduled to release them in early 2025, with December 31, 2023 as the reference date. As for the financial performance of labor insurance, due to the government's large-scale allocation in recent years and the benefit from the rising global financial market in the past two years, the performance of labor insurance has improved. The market expects that the bankruptcy deadline for labor insurance will be delayed for several years from 2028. As for the hidden debt of labor insurance, with the aging population, the number of people receiving old-age pensions from labor insurance continues to increase. According to the latest statistics from the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan, as of the end of June this year, the total hidden debt (future payment obligations) of the central and local governments amounted to a staggering 18.7753 trillion yuan, with the hidden debt of labor insurance reaching 11.8628 trillion yuan, both setting a new record and highlighting the heavy burden on the next generation. Utilization of the labor insurance fund According to data released by the Department of Labor Funds Management of the Ministry of Labor, as of the end of August 2024, the scale of the 'Labor Insurance Fund' was approximately 1.949 trillion yuan, including self-management and entrusted management: Self-management: Deposits in financial institutions, government bonds, short-term notes, real estate, stocks and benefit certificates, government or public enterprise loans, loans to the insured, overseas investments (fixed income, equity securities, and alternative investments) Entrusted management: Domestic entrusted management, overseas entrusted management (fixed income, equity securities, and alternative investments) In addition, according to the data, as of the end of August this year, the performance of the labor insurance fund was 15.41%, higher than the yield of Taiwan's 10-year government bonds, the Bloomberg Global Bond Index, but lower than the Taiwan Stock Exchange Weighted Index and the MSCI Global Stock Index. Would it be better to open up investment in BTC? It can be anticipated that the labor force will inevitably decrease in the future, and how to stabilize the development of labor insurance has become one of the government's biggest headaches. In the context of BTC's recent impact on historic highs, this article proposes a speculation: if Taiwan opens up the labor insurance fund to invest in BTC, can it further extend the bankruptcy deadline for labor insurance? The author compares the performance of BTC investments in the past six years with the yield of the labor insurance fund (looking at annual performance only): In 2019, the yield was 90% for BTC and 13.3% for the labor insurance fund. In 2020, the yield was 254% for BTC and 8.83% for the labor insurance fund. In 2021, the yield was 45.1% for BTC and 9.71% for the labor insurance fund. In 2022, the yield was -64% for BTC and -7.45% for the labor insurance fund. In 2023, the yield was 150% for BTC and 14.44% for the labor insurance fund. As of August 2024, the yield was 40% for BTC and 15.41% for the labor insurance fund. It can be seen that BTC has outperformed the labor insurance fund in terms of yield for five out of the six years, but the fall in 2022 was 9 times that of the labor insurance fund, and the volatility was higher. On the other hand, there have been cases of government funds being used to purchase BTC, with El Salvador and some US retirement funds already implementing it: El Salvador purchases BTC on a daily basis and has purchased a total of 5,918 coins, worth about 426 million US dollars. It has made substantial profits after surviving the bear market. One of the most financially sound retirement funds in the United States, the Wisconsin Investment Board (SWIB), also revealed its investment in BTCSpot ETF in its Holdings report submitted this year. Although there are successful examples of other governments or funds investing in BTC, the probability of the Taiwanese government opening up the labor insurance fund to invest in BTC should be low due to its volatility and market perspectives. But... who knows what will happen in the future? Related reports: BTC breaks 70,000, Ethereum rises to 2,600 US dollars, but the record high open interest in BTC suggests a reversal is imminent? Arthur Hayes's long article: China's 'epic point shaving' will eventually lead hot money to flow into BTC. Gold approaches a new high of 2,800 US dollars, presidential election, war hedge... the increase is even greater than the S&P 500. Will BTC be the next one? This article was originally published on BlockTempo, the most influential blockchain news media in Taiwan, on BlockTempo.