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Another $100 million institutional money coming to Bitcoin

Photo of: Joseph Stone
by Joseph Stone

One more institutional investor invests in Bitcoin. US insurer MassMutual acquires more than 5,000 BTCs through asset manager NYDIG. The risk is moderate, with Bitcoin accounting for only 0.04% of its investments.

The start of MassMutual, a U.S. insurer, in Bitcoin further supports JPMorgan Chase’s thesis. According to the bank, the growing adoption of institutional investors could overshadow gold investments.

MassMutual is acquiring approximately 5,400 BTCs for a total investment of $100 million. This purchase is being made through NYDIG.

The insurer also took advantage of the opportunity to take a $5 million equity stake in the New York-based digital asset manager ($2.3 billion in crypto under management). These investments are presented as “a measured but significant exposure”.

In terms of risk, MassMutual is admittedly cautious. Bitcoin represents only a small part of the company’s overall investments.

“Our $100 million investment in Bitcoin through NYDIG will account for 0.04 percent – less than one-tenth of one percent – of our total GIA,” the insurer said.

However, this decision confirms a trend among institutional investors to invest in cryptocurrencies for the first time. The most emblematic player in this field remains without a doubt MicroStrategy.

In September, the software company invested more than $425 million in cash in Bitcoin. In December, this capital increased by another $50 million. And the firm does not intend to stop there.

It plans to invest the proceeds of a $550 million equity offering in Bitcoin. However, this decision does not satisfy all the players in the financial markets. A Citi Bank analyst lowered his recommendation on MicroStrategy following this announcement.

To secure their exposure to cryptocurrencies, institutional investors are choosing to invest indirectly in ETFs such as Grayscale. The growth of Grayscale’s purchases on behalf of its investors is testimony to this.

This week the asset manager crypto announced the purchase of an additional 14,591 Bitcoin, equivalent to approximately $266 million. Grayscale is also banking on Ether with the acquisition of 105,000 Ethereum tokens ($58.5 million).