The leading investment bank estimates that institutions will inject about $600 billion into Bitcoin
According to a recent Bloomberg report, the bank predicts that many companies will soon get exposure to Bitcoin (BTC). There will be a potential consequent inflow of up to $600 billion into the digital asset. To arrive at this figure, insurance companies from Asia, Europe and the US will need to set aside 1% of their assets into BTC.
The claim comes after the insurance firm MassMutual made a $100 million purchase in BTC. The insurance company has made a considerable investment in Bitcoin, although its goal was getting exposure to the crypto sector. Crypto analysts believe that institutional demand for digital assets is on the rise.
The domino effect
The Massachusetts Mutual Life Insurance Company isn’t the only institution that has poured its funds into Bitcoin. MicroStrategy and Square have already acquired millions worth of Bitcoin. These recent investments indicate that wealthy investors and even giant institutions are all looking to get a piece of BTC.
Regarding the Massachusetts-based firm’s move to purchase Bitcoin, JPMorgan quantitative strategist Nikolaos Panigirtzoglou asserted, “MassMutual’s Bitcoin purchases represent another milestone in the Bitcoin adoption by institutional investors. One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example”.
Panigirtzoglou maintains that MassMutual could be a trendsetter, and its BTC foray could trigger other companies to follow suit in getting exposure to Bitcoin.
While Panigirtzoglou’s views on Bitcoin seem to be optimistic, the bank’s chief executive Jamie Dimon appears to think otherwise.
Last week, strategists at JPMorgan, including Panigirtzoglou, claimed that the massive adoption of crypto in mainstream finance is coming at the expense of the gold market.
Bitcoin recently surpassed its all-time high after a strong price rally. Its prices have since dipped slightly, but the market is still bullish. The leading cryptocurrency has a current market cap of $355 billion and remains dominant in the cryptocurrency sector. Gold, on the other hand, has seen massive outflows since October.