Market Musings

Has One Insurance Company Just Sparked $600B of Demand for Bitcoin? JPMorgan Thinks So

Published on:
December 14, 2020

Given how Bitcoin's entire market cap is about $354 billion right now, this is a big deal.

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Last week, the life insurance giant MassMutual announced that it was snapping up $100 million in Bitcoin. According to analysts, this is a *big* deal.

According to Bloomberg, JPMorgan believes that this could fire the starting gun on deep-pocketed insurance firms and pension funds beginning to gain exposure to crypto. Indeed, it’s worth noting that MassMutual has a general investment account of $235 billion.

Although the investment bank’s experts don’t anticipate that such institutions will ever allocate a substantial chunk of their portfolio to Bitcoin, the effects of wider adoption could be significant.

JPMorgan said that Bitcoin demand could surge by an astounding $600 billion if pension funds and insurers in the U.S., Europe, the U.K. and Japan decided to allocate 1% of assets to Bitcoin. Bear in mind that the whole market cap of Bitcoin only stands at $354 billion right now.

This could help BTC on its way to a market cap of $1 trillion, which would work out at a price per coin of about $53,850. Oh my.

Nick Emmons, who worked in insurance before co-founding the Upshot protocol, said MassMutual’s move matters because insurance firms are far more risk averse than tech companies. He wrote:

"Partly as a result of that risk aversion, insurance companies rarely move into industries alone — no one wants to be first. Someone like MassMutual entering the space in the way they are means more insurance companies are close behind."

Emmons also warned that this could lead to “swift (likely misguided)” regulations being put into place, warning: “Laws are written in ink. They’re easy to write down, but hard to erase.”

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