Bitcoin Would See Billions of Inflows If All Life Insurance Firms Followed MassMutual

Nick Chong

1 year ago

2 mins read

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MassMutual shocked the industry yesterday when it purchased Bitcoin to complement its general investment account.

Massachusetts Mutual Life Insurance Company, also known as MassMutual, is a long-standing life insurance company that services five million clients. It is based in the city of Springfield, Massachusetts, with over 7,000 employees. The company is reported to own over $675 billion worth of assets, according to Wikipedia.

While this BTC investment represents a small portion of its balance, many see this as massive for the adoption of BTC.

According to a Wall Street Journal article, other insurance firms bought Bitcoin around the same time as MassMutual. Those companies were not named.

MassMutual’s Bitcoin Purchase Could Just Be the Tip of the Iceberg

As noted by former Bitcoin fund manager and researcher Tuur Demeester, if the entire life insurance space was to allocate 0.1% of its assets to Bitcoin, the cryptocurrency would see massive inflows:

“Back of napkin: if the entire Life Insurance sector were to allocate just 0.1% of its assets to bitcoin at current prices, they would be in the market to buy 251,400 BTC for $4.5B – or 1.35% of circulating supply.”

Of note, MassMutual’s purchase represented only 0.04% of the firm’s general investment account. Though, this was notable anyway.

Life Insurance Companies Are Just the Start

Life insurance companies are arguably just the tip of the iceberg, though.

MicroStrategy just revealed that it has raised $650 million in a private debt offering to institutional clients. The American business services company will purchase BTC with this capital.

“MicroStrategy estimates that the net proceeds from the sale of the notes will be approximately $634.9 million, after deducting the initial purchaser’s discounts and commissions and estimated offering expenses payable by MicroStrategy. MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending identification of working capital needs and other general corporate purposes.”

Another analysis found that if every publicly listed company put 1% of their balance sheets into Bitcoin, there would be inflows of dozens of billions of dollars into the leading cryptocurrency.

The fact that there is so much capital on the sidelines shows how much Bitcoin could rally should it gain traction as a global reserve asset or even as an alternative store of value.