American Insurance behemoth Massachusetts Mutual Life Insurance Company (MassMutual) recently bought $100 million worth of Bitcoin, and JPMorgan believes it is a buy signal for more institutional investors.
The Wall Street powerhouse, JPMorgan, believes that Bitcoin’s institutional adoption has only just begun as institutional demand for the crypto asset will continue to increase following MassMutual’s investment.
“MassMutual’s Bitcoin purchases represent another milestone in the Bitcoin adoption by institutional investors. One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example,” JPMorgan strategist Nikolaos Panigirtzoglou said.
The strategist estimated that Bitcoin only represents 0.18% of the financial investments of family offices, while on the other hand, gold ETFs represent 3.3%. For that reason, a modification in the allocation of funds would bring “billions” into the crypto market.
The banking giant suggests that three major aspects have been the key to the institutions’ interest in Bitcoin: the currency devaluation in significant economic situations, the global pandemic, and the U.S. political election.
Earlier reports suggest that MassMutual already owned a $5 million minority equity stake in NYDIG, a non-wholly owned subsidiary of Stone Ridge, an institutional asset management company that recently purchased $115 million worth of BTC, calling it a reserve asset.
As a crypto-focused asset manager, NYDIG will likely provide custody services for MassMutual’s $100 million worth of Bitcoin, which is 0.04% of the insurance company’s general investment of almost $235 billion since September 30, 2020.
MassMutual is the latest corporation to join Bitcoin’s march into the financial mainstream this year. Over the last six months, the crypto industry has welcomed institutions like MicroStrategy and Square with massive purchases from each.
A recent report revealed that institutions’ continuous acquisition of Bitcoin could place MicroStrategy and MassMutual as Grayscale’s biggest competition soon.
