MassMutual shocked the industry yesterday when it bought Bitcoin to supplement its general investment account.
Massachusetts Mutual Life Insurance Company, also known as MassMutual, is a long-standing life insurance company serving five million customers. The company is based in Springfield, Massachusetts and has over 7,000 employees. According to Wikipedia, the company is said to have assets valued at over $ 675 billion.
While this BTC investment is a small part of their balance, many view this as massive for BTC adoption.
According to an article in the Wall Street Journal, other insurance companies were buying bitcoin around the same time as MassMutual. These companies were not named.
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MassMutual’s Bitcoin purchase could be just that tip of the iceberg
As former Bitcoin fund manager and researcher Tuur Demeester noted, the cryptocurrency would see massive inflows if the entire life insurance sector allocated 0.1% of its assets to Bitcoin:
Backside of napkin: If the entire life insurance sector gave up just 0.1% of its assets at current prices for Bitcoin, it would be in the market to buy 251,400 BTC for $ 4.5 billion – or 1.35% of the circulating supply. “
Notably, the purchase of MassMutual represented only 0.04% of the company’s general investment account. But that was still remarkable.
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Life insurance companies are just the beginning
Life insurance companies are arguably just the tip of the iceberg, however.
MicroStrategy just announced that it has taken out a private debt offering for institutional clients worth $ 650 million. The American business services company will use this capital to acquire BTC.
“MicroStrategy estimates that the net proceeds from the sale of the Notes, after deducting initial purchaser discounts and commissions and the estimated cost of the offer payable by MicroStrategy, will be approximately $ 634.9 million. MicroStrategy intends to invest the net proceeds from the sale of the Notes in Bitcoin, in accordance with its Treasury Reserve Policy, pending working capital and other general corporate purposes. “
Another analysis found that if every publicly traded company invested 1% of its balance sheets in Bitcoin, tens of billions of dollars would flow into the leading cryptocurrency.
The fact that so much capital is on the sidelines shows how much Bitcoin could rebound if it gains importance as a global reserve asset or even as an alternative store of value.
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Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Bitcoin Would See $4.5b Inflows if All Life Insurance Firms Followed MassMutual