MassMutual's Bitcoin Buy May Presage $600B Institutional Flood: JPMorgan

JPMorgan analysts have said the recent bitcoin purchases by Massachusetts Mutual Life Insurance Co. are a sign of growing mainstream acceptance for the cryptocurrency.

• “MassMutual’s bitcoin purchases represent another milestone in the bitcoin adoption by institutional investors,” JPMorgan’s strategists said, according to Bloomberg on Monday.
• “One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example,” they added.
• On Thursday, the 169-year old insurance firm announced bitcoin purchases worth $100 million, as well as a $5 million equity stake in NYDIG – a financial services firm focused on bitcoin with $2.3 billion in the asset under management.
• MassMutual’s move suggests insurance firms and pension funds are beginning to look at bitcoin as an investment/reserve asset alongside increased demand from wealthy investors and family offices.
• According to JPMorgan, bitcoin may find an additional demand of $600 billion if pensions insurance firms in the U.S., European Union, U.K. and Japan allocate 1% of assets to the top cryptocurrency.
• Regulatory hurdles, however, may complicate matters for such firms, limiting their participation in the bitcoin market, the strategists said.

Read more: Bitcoin’s Rising Popularity With Investors Means Gold Will ‘Suffer’: JPMorgan