Quick take:
- MassMutal Life Insurance recently purchases $100 million in Bitcoin
- Insurance companies are known to avoid unnecessary risks
- The 169-year-old insurance company buying Bitcoin is a sign that BTC is no longer a ‘risk-off’ asset
- Bitcoin being sold now by miners and retail traders is increasingly being scooped up by institutional investors
The herd of institutional investors has truly arrived in the crypto-verse. Late yesterday, it was announced that the Massachusetts Mutual Life Insurance Company (aka MassMutual) recently purchase $100 million in Bitcoin. The transaction was facilitated by the New York Digital Investment Group (NYDIG).
The Co-founder and CEO of NYDIG described the occasion as an incredible moment in history for both Bitcoin and the insurance industry.
We are proud of this incredible moment in the history of both Bitcoin and the insurance industry. This reflects the expansion of Bitcoin to insurance company general investment accounts, as well as NYDIG’s unique ability to meet the complex needs of the most demanding institutional investors.
Bitcoin is No Longer a Risk off Asset
MassMutual is a 169-year-old insurance company and its purchase of Bitcoin is a clear indicator that they have done all the necessary risk assessments regarding the digital asset. Insurance companies are known to have a low tolerance for unnecessary risks.
Their purchase can be interpreted to mean that they do not view Bitcoin as a risk-off asset. Crypto Twitter member @tradeboicarti16 was one of the first to connect the dots regarding this and shared his analysis via the following tweet.
When an insurance company, which historically are completely risk off, invests in #btc, it tell you something. There is almost zero risk tolerance at an insurance company pic.twitter.com/n9C2vHZXzy
— Tradeboi Carti (@tradeboicarti16) December 10, 2020
Risk-off assets are generally regarded as volatile and are the first to be offloaded during a situation of market panic as investors attempt to preserve their capital.
Bitcoin Being Sold is Ending Up in the Vaults of Institutional Investors
As explained in an earlier analysis, every Bitcoin dip from around September has probably been bought by institutional investors. The latter category of investors has accumulated close to 900k BTC with 100k Bitcoin purchased in less than 60 days.
It is therefore clear as daylight that Bitcoin is on a path towards becoming the most scarce asset in the history of trading and investing.
