MassMutual’s BTC Purchase Shows Increasing Institutional Demand

News / 14.12.2020

Last week, American insurance giant Massachusetts Mutual entered into the cryptocurrency world with a $100 million investment in Bitcoin, making it the latest large mainstream corporation to join the bandwagon. 

Without particularly clarifying why it saw Bitcoin as a reasonable financial investment, MassMutual told the Wall Street Journal it looked for measured yet significant exposure to an increasingly digital world.

More Bitcoin Demand to Follow

American multinational investment bank JPMorgan Chase & Co. believes that the leading cryptocurrency has taken institutional investors’ interest, and more purchases will follow. According to the bank, growing institutional demand could see up to $600 million in Bitcoin shortly.

JPMorgan also commented on Square’s recent $50 million investment as a strong vote of confidence for the future of Bitcoin and a lot of potential for cryptocurrency as an asset.

JPMorgan’s strategist Nikolaos Panigirtzoglou said MassMutual’s Bitcoin investment shows how the crypto asset’s adoption is spreading from family offices and insurance policy companies to wealthy investors’ pension funds. 

The strategist predicted that even bigger institutions are likely to follow MassMutual. Panigirtzoglou sees the investment as a momentous crossroad and a huge milestone in Bitcoin adoption by institutional investors.

“One can see the possibility of demand that could arise over the coming years as other big insurance companies and pension funds follow in their footsteps,” he said.

The strategist believes the insurance firms and pension funds are highly unlikely ever to make high allocations. Yet, even a little change towards cryptocurrency could be significant for the crypto industry. 

According to him, at least 1% of pension funds and insurance companies in the United States, the UK, and also Japan assets will bring an additional $600 billion for Bitcoin’s market cap, with the current market cap standing at about $354 billion at the time of writing.

Bullish MicroStrategy

With MicroStrategy’s recent massive acquisition of bitcoins and plans underway to purchase more BTC, it’s clear that mainstream finance and technology firms have their eyes fixed on the crypto asset.

Simultaneously, traditional capitalists like insurance companies and pension plan profiles deal with regulative difficulties connecting to risk levels and liability mismatches, most likely to restrict how much money they can put into Bitcoin.

Mandy Williams joined the crypto space in 2016, and since then she has been learning and writing about cryptocurrencies and blockchain technology.