If pension funds and insurance companies in the US the euro area, the UK and Japan allocate 1% of assets to the most popular cryptocurrency, bitcoin (BTC), strategists at JPMorgan said that would result in additional BTC demand of USD 600bn.
These investors, however, face regulatory obstacles related to risk levels. And mismatches of liability, probably limiting how much they can put into BTC, Bloomberg reported, citing a strategists’ note.
As reported by cryptonews, last week to add to its general investment fund. America’s Massachusetts Mutual Life Insurance (also known as MassMutual) has bought USD 100m worth of bitcoin. The holdings of MassMuttual are now 0.04% held in BTC. But the company has also moved to snap up a USD 5m minority equity stake in NYDIG. A Stone Ridge-run subsidiary company that provides institutional investors with crypto services.
Should the above-mentioned pension funds and insurance companies also allocate 0.04% of their assets to BTC in the US the euro area, the UK and Japan, this would mean an additional demand of USD 24bn. The market capitalization of BTC today is around USD 355bn.
“One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example,” according to the strategists at JPMorgan.
In the meantime, US-based business intelligence firm MicroStrategy confirmed on Friday. That it raised USD 650m by selling convertible senior notes due 2025 to purchase more BTCs.
BTC trades at USD 19,111 (05:14 UTC) after a rally on Sunday and is up by 1% in a day, trimming its weekly losses to less than 1%. The price rose in a month by 18% and in a year by 169%.