If pension funds and insurance companies in the US, Europe and Japan allocated only 1% of their reserves in Bitcoin, the result would be a $600 billion demand on digital assets.
Recently Bitcoin has been gaining a lot of interest from institutional investors in a move that started even before the recent considerable appreciation of digital assets. Much of this interest comes from the fame of value reserve that Bitcoin has been gaining, attracting even investments of hundreds of millions.
The most recent investment, of US$ 100 million in Bitcoin, made by the insurance company MassMutual attracted the attention of many investors and also news vehicles.
An article published in Bloomberg highlighted a note by JPMorgan strategists on how the recent purchase of Bitcoins demonstrates a shift in demand for digital assets by institutional investors.
The famous news site highlighted the opinion of different strategists, who believe that a century-old insurance company betting on Bitcoin is a sign that something is changing in the types of investors present in the digital asset ecosystem. The site highlighted the opinion of strategist Nikolaos Panigirtzoglou, who said in a note:
„The purchase of $100 million suggests that the adoption of Bitcoin is spreading from family offices and wealthy investors to insurance companies and pension funds“.
According to JPMorgan strategists, even if these two sectors do not allocate much of their reserves in Bitcoin, this change may be significant in the near future.
„MassMutual’s purchases represent another important point for the adoption of Bitcoin by institutional investors. It is easy to see the potential demand that could arise in the coming years among other insurance companies and pension funds that follow suit“.
The total investment in Bitcoin by MassMutual was 0.04% of the total investment account of the insurer (about $ 235 billion). Still, the company informed that this was an initial investment and only an initial step before exploring further opportunities. If the company reaches 1% of its investment portfolio in Bitcoin, we may have a significant change.
„If pension funds and insurance companies in the US, Europe and Japan allocated only 1% of their reserves in Bitcoin, the result would be a demand of US$ 600 billion in digital assets, nearly double the current market capitalization of around US$ 356 billion,“ Bloomberg highlighted.
Time is running out for retail investors?
The institutional investment is something expected among Bitcoin investors and a very important point for the growth of cryptomoedas. But this also raises the concern of the retail investors, will we still have space inside this ecosystem?
Recently, the CEO of a UK Fintech said that Bitcoin was a chair dance, and that the music was running out. This alludes to the fact that the window of opportunity for those who want to buy smaller fractions for the current price may be ending.
With a large increase in demand by institutional investors, it can be very difficult for smaller investors to buy Bitcoin for a price at the current levels or have the possibility to buy a whole Bitcoin. However, for those who hold until then, it may be a plan coming true.