2020 has been the year of the institution. Companies such as MicroStrategy, Square and Stone Ridge have all piled their money into assets like bitcoin and given new meaning to the crypto space. Now, with just weeks to go before the year is out, several other family offices such as the Massachusetts Mutual Life Insurance Co. are following in these firms’ footsteps.
Massachusetts Mutual Is the Latest Institutional Fan of BTC
Massachusetts Mutual has put approximately $100 million of its money from its general investment account into bitcoin. While the number is relatively small for the firm considering its general investment account currently holds about $235 million at the time of writing, the move is heavy in the sense that another institutional player is willing to take a chance on an asset that has been considered unstable and volatile for the past six years.
The investment was made through NYDIG, a New York-based fund management company. Presently, the firm manages over $2 million in digital assets for its clients. Massachusetts Mutual also got its fingers on a $5 million minority equity stake in the enterprise, which was previously referred to as the New York Digital Investment Group and goes back to the year 1851. That’s pre-Civil War.
NYDIG says that over the past few months, business has been quite good. Many of the company’s clients have sought to invest in bitcoin considering how strong the asset has been doing. The currency has recently experienced a drop of nearly $1,000, though it’s still traversing $18,000 territory at this stage.
Ross Stevens – founder and executive chairman of NYDIG – says that many companies have been purchasing bitcoin as of late considering how poorly the dollar has been doing and the fact that interest rates are near zero.
In addition, many individuals are now looking at bitcoin in an entirely new light. They see it not as a speculative asset, but rather as a hedge tool; something that can protect one’s wealth during times of economic strife. In recent weeks and months, some of the world’s biggest investors – such as Paul Tudor Jones – have commented that any investor who turns his or her back on bitcoin is making a terrible mistake.
It’s a Mistake Not to Own BTC At This Point
Also, the currency is doing so well that analysts from JPMorgan believe that precious metals such as gold are likely to suffer in the future at the hands of the digital asset. Many investors are now taking their money out of the gold market and placing it into bitcoin considering it’s become such a “safe haven” in recent months.
Despite all this, however, bitcoin and crypto remains a relatively small market when compared with gold, stocks and similar traditional investments, though we can potentially expect more regulations sometime next year, suggesting the space is growing like crazy.