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.