Bitcoin went a strong pullback as its price dipped lower to $17,700. The cryptocurrency went on a downward string as the stock market faced a correction. However, it bounced back higher above $18,000 amid American insurance company MassMutual invests $100 million in Bitcoin. Even though MassMutual’s investment in Bitcoin is quite a tiny one, pertaining to its general investment of nearly $235 billion as of Sept 30. It signifies a further peak for the world's largest cryptocurrency by market capitalization.
Massachusetts Mutual Life Insurance Co. is the latest mainstream firm to purchase Bitcoin for its general investment fund. The company purchased the Bitcoin through New York-based fund management firm NYDIG that handles about $2.3 billion worth of cryptocurrencies under management.
NYDIG will also provide crypto custody services for MassMutual’s Bitcoin. The insurance company has also purchased a further $5 million minority equity stake in NYDIG.
MassMutual's spokeswoman Chelsea Haraty said to Bloomberg:
MassMutual is a 169-year-old insurance company, founded in 1851. The firm’s intention to add Bitcoin to its investment portfolio includes exposure to digital investments while keeping a diversified investment portfolio.
MassMutual’s latest Bitcoin purchase will represent about 0.04% of the general investment account of nearly $235 billion as of Sept. 30.
Analysts say that Bitcoin is like digital gold that can retain its value among turmoil and a hedge against inflation. The cryptocurrency hit its all-time high earlier this month. The performance of Bitcoin this year has more than doubled.
The cryptocurrency had gained significant attraction among billionaire investors such as Paul Tudor Jones and Stanley Druckenmiller who publicly disclosed their bitcoin investments in recent months.
Meanwhile, corporations too have joined the Bitcoin club with Jack Dorsey’s Square Inc. buying $50 million of bitcoin in October for its corporate treasury. MicroStrategy Inc. invested about $425 million in 2020. Recently, the firm offered up to $550 million in convertible bonds to use the net proceeds to buy bitcoin.