Earlier this month, insurance giant Massachusetts Mutual announced a $100 million investment in Bitcoin (BTCUSD) as part of its overall investment portfolio.
New York Digital Investment Group (NYDIG) was the conduit via which the corporation acquired its Bitcoin and a $5 million minority stock investment in the fund management organization. Click on this link: https://alligat0r.com/custom/exchange-pairs/0.14/eth/usd/info to learn some interesting information regarding cryptocurrency rise.
It was said in a news release by MassMutual that the investment provides the company with “measured but substantial exposures to a rising economic facet of our increasingly digital environment.”
Who is MassMutual?
MassMutual is a life insurance company that has been in business since 1851 and has a long history of providing excellent service to its clients. It does not have shareholders since it is a mutual corporation.
Instead, its members and participating policy owners have a stake in the company’s ownership, have the right to vote for its board of directors, and even collect dividends from the company.
According to the corporation, the firm has authorized the payment of more than $1.7 billion in payouts to policyholders in 2021.
Why are Large Public Companies Buying Bitcoin in 2022?
On the surface, it seems that a massive corporation with shareholders would be mad to transfer a part of its cash reserves — which it would maintain to satisfy short-term commitments — into a risky asset.
Nevertheless, the goal of several Bitcoin supporters came true in August 2020 when Michael Saylor, CEO of MicroStrategy, accomplished precisely that goal. Saylor has emerged as a vocal proponent of Bitcoin, and he has publicly publicized his company’s desire to adopt the cryptocurrency.
How MassMutual’s Entry into the Digital Currency World is Significant?
Massachusetts Mutual is an outlier among the institutional investors that have poured money into Bitcoin for various reasons. For starters, it is a conservative investor, which means that it only makes investments in financial items that have been tried and proven or rated as investment grade.
According to a recent interview with Yahoo! Finance, MassMutual CEO Roger Crandall said that the firm’s investment portfolio was aimed toward a “long-term perspective” and comprised chiefly of investment-grade fixed-income instruments, real estate, and stocks.
This method is critical in ensuring that the corporation has a consistent source of money to pay out its annuities and claims payments. Their pledges may add a sizable sum: the corporation paid out $5.7 billion in claims in the last year alone.
What Does This Mean Going Forward?
Institutional Bitcoin adoption starts a virtuous loop that leads to increased overall adoption and, with it, better network stability.
We’re still in the early stages of what we’re witnessing. Even while some big names publicly embrace Bitcoin, they only account for a small percentage of financial institutions.
More profound repercussions, though, remain. Consider Tesla, which makes up a sizable portion of the S& P 500 index and has bitcoin on its books. Bitcoin is currently held indirectly by passive index investors who invest in the S& P 500.
This may sound far-fetched, but consider that Tesla has had a strong association with the price of bitcoin over the past year, and Tesla, in return, has an influence on the price of the S& P 500. You can check out the Alligat0r for cryptocurrencies at https://alligat0r.com/