With Bitcoin crossing new thresholds, more and more Pension Funds and Insurance Firms are entering the Bitcoin and crypto market.
An increasing number of insurance companies, pension funds, and public corporations are investing in Bitcoin. The interest among institutional investors to diversify part of their asset base into BTC is fueling speculations about whether governmental bodies themselves will begin to invest in these digital assets through their sovereign wealth plans.
Institutional Investments Into BTC
In December 2020, MassMutual, a well-regarded Massachusetts-based insurance provider, added $100 million worth of Bitcoin to its general investment account. It made the purchase from the New York Digital Investment Group, backing it up by a $5 million equity stake in the company.
Even two years before 2020, when Bitcoin had not yet started with the explosive bull run that it has been experiencing for a year now, Morgan Creek had launched a Digital Asset Index Fund giving indirect exposure to Bitcoin and other crypto majors. In February 2019, two significant US pension funds invested $40 million in Morgan Creek’s fund.
Coming back to more recent times – KiwiSaver – a $350 million retirement plan run by New Zealand Funds Management, allocated 5% of its assets into Bitcoin on March 25, 2021.
Factors Driving BTC Investments
Much of the interest around Bitcoin is driven by its astounding bull run over the past year. In January 2017, the price of Bitcoin was recorded at nearly $921. Owing much of this growth to its bull run between 2020 and 2021, the price crossed the mark of $57,000 on March 30, 2021.
The hopes of the best possible returns from Bitcoin were further augmented by fiat currency debasement concerns. To counter the Coronavirus pandemic-induced economic blows, central banks worldwide introduced significant cash influxes to support stimulus packages announced by governments. This created fear, as well, of rising inflation.
Looking at the traction that BTC has already managed to gain from the prevailing economic scenario, it is well expected that it would bring many other pension funds and insurance firms under its ambit.