MassMutual’s Bitcoin (BTC) Investment Can Create $600B Institutional Demand
JPMorgan strategists note that if all big fund houses and institutional giants start allocating even 1% of their assets to Bitcoin, it can create an additional inflow of $600 billion in the world’s largest cryptocurrency.
The latest $100 million Bitcoin investment from MassMutual has sparked interest among institutional players. Although several institutional players have previously made big bets on Bitcoin, MassMutual is probably the first insurance giant to get Bitcoin exposure. Having analyzed this situation with BTC, JPMorgan strategists wrote:
“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 strategists call it a significant development in the crypto space. They further added that this move can potentially create additional institution demand for BTC in the coming years. JPMorgan notes that Bitcoin adoption is on the rise among institutional players like family offices, wealthy investors, insurance firms, and pension funds.
If not much, even a marginal asset allocation by these giants into Bitcoin will make a huge difference. Interestingly, JPMorgan notes that if these giants across the US, UK, Europe, and Japan invest 1% of their assets, it could lead to an additional $600 billion demand for Bitcoin. However, the strategists also said that regulatory hurdles can create complications for such firms.
Institutional Inflow in Bitcoin (BTC) Continues to Surge, JPMorgan Says
Over the last few weeks, there’s a steep rise in institutional participation in Bitcoin. Several hundred million dollars have entered BTC in recent times. In last week, apart from MassMutual, business intelligence firm MicroStrategy declared offering $650 million worth of convertible notes.
MicroStrategy has already invested $475 million in Bitcoin (BTC) so far in 2020. The company has raised an additional $650 million and plans to invest all these proceeds to Bitcoin (BTC). This could take MicroStrategy’s total Bitcoin (BTC) to above $1 billion.
Also, this is not the first time that JPMorgan has been speaking in favour of Bitcoin (BTC). Last month, a JPMorgan report stated that Bitcoin is turning out as a strong alternative for Gold. The banking giant noted that money has been moving out of the Gold ETFs and flowing into Bitcoin. JPMorgan chief strategist Nikolaos Panigirtzoglou said:
“The bitcoin flow outlook for the medium to longer-term looks positive as we anticipate that the contrasting institutional flow picture over the previous two months with inflows into the Grayscale Bitcoin Trust and outflows from Gold ETFs would become a structural trend. The adoption of bitcoin by institutional investors has only begun”.
It will be interesting to see further institutional developments taking place in the Bitcoin space in 2021.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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