Insurance Giant MassMutual Buys $100 Million Bitcoin
Insurance giant Massachusetts Mutual Life Insurance Co. (MassMutual) is the latest public company to use some of its treasury to buy Bitcoin.
The Nasdaq-listed insurance giant announced yesterday it had made the move into the Bitcoin space buying $100 million of BTC and making a $5 million minority equity stake in crypto fund management firm New York Digital Investment Group LLC (NYDIG).
MassMutual’s $100 million investment in Bitcoin from its general investment account, which is worth $235 billion. This might only be 0.04% of the general investment account, but it’s yet another significant breakthrough for Bitcoin adoption.
Chelsea Haraty – a spokesperson for MassMutual said it was the first step for the institution ‘and like any investment, may explore future opportunities.’
MassMutual was founded in 1851 and serves 5 million clients. It is 89th on the Fortune 500 list with $567 billion AUM as of 31 December 2019.
MassMutual purchased the Bitcoin through NYDIG at an estimate price of $18,279 per Bitcoin, which would give the insurance giant around 5,470 bitcoins.
According to the official announcement, MassMutual’s Bitcoin position will be ‘held on NYDIG’s secure, audited, and insured custody platform,’ which custodys $2.3 billion worth of Bitcoin and other leading altcoins.
MassMutual CIO, Tim Corbet said of the move into the Bitcoin space,
‘We believe that having an equity stake in NYDIG as well as a Bitcoin position in our general investment account will help us deliver long-term value to our policyowners. We look forward to further exploring additional ways to work with NYDIG, consistent with our ongoing focus on innovation and diversification.’
NYDIG CEO Robert Gutmann said MassMutual’s decision to move some of its liquid treasury into Bitcoin was an ‘incredible moment in the history of both Bitcoin and the insurance industry.’
Nobody Wanted To Be First, But Nobody Will Want To Be Last
Bitcoin is coming of age, and is the topic of discussion in pretty much every boardroom around the world. Nobody wanted to be first, but nobody will want to be last either.
MassMutual’s move into the Bitcoin space was preceded by MicroStrategy, which probably sped up MassMutual decision making.
Nasdaq-listed MicroStrategy announced in the summer that it was using most of its liquid treasury into buying Bitcoin. To date, the software intelligence firm has spent $475 million on Bitcoin.
CEO Michael Saylor announced earlier this week that MicroStrategy would be raising a further $400 million, which it intends to invest in Bitcoin.
Since MicroStrategy made its move there has been considerable interest from the institutional space. Jack Dorsey’s Square Inc. made a $50 million investment in Bitcoin, and payment giant PayPal launched a Bitcoin service in October, and has been accumulating Bitcoin ever since.
MassMutual Will Be One Of Many In The Coming Years
We at Bitcoin Maximalist said immediately after MicroStrategy’s first announcement that it had opened the floodgates for institutional adoption of Bitcoin.
Every public company and fund has a fiduciary duty to look after its shareholders, and with the rise of MicroStrategy’s stock price since then, many institutional investors are taking note.
Added with the rise of Bitcoin, negative yielding bonds, and the magical creation of trillions of dollars, an uncorrelated asset like Bitcoin is the perfect hedge.
The floodgates are open, and I expect many more announcements like this in the coming months and years. The question is, who will be the first major institution? My guess is Microsoft.
Author: Tommy Limpitlaw
Why should I buy Bitcoin?
Bitcoin is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent.
How much should I invest in Bitcoin?
Bitcoin is a new technology, and an asset that is finding its value. It has great potential, but the price is volatile, so investing in it should only be for those who understand it and have faith in it. And only invest as much as you can afford to lose.
How do you make money with Bitcoin?
There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.
How high will the Bitcoin price reach
There have been many price predictions ranging from $0 to tens of million per Bitcoin. But the truth is, nobody knows for sure. However, it is the soundest and hardest money ever created. Many say it is digital gold, but I believe in the digital age, it is more useful than gold. So, let’s say Bitcoin reaches the market cap of gold, which is believed to be $10 trillion, each Bitcoin would be worth $500,000. Is that reachable? Absolutely! Will it be plain sailing? Absolutely not!