How $ 600 billion might move into Bitcoin: JP Morgan strategist

In short

  • Insurance companies and pension funds could invest $ 600 billion in Bitcoin over the coming years.
  • For that to happen, institutions in the US, UK and Japan need to allocate only 1% of their funds to the cryptocurrency.
  • Massachusetts Mutual Life Insurance Company recently set an example by buying $ 100 million worth of Bitcoin.

Strategists at American bank JPMorgan Chase have suggested that insurance companies and pension funds worldwide could invest $ 600 billion in Bitcoin, Bloomberg reported today.

“MassMutual Bitcoin purchases represent another milestone in the adoption of Bitcoin by institutional investors. You can see the potential demand that may arise over the coming years as other insurance companies and pension funds follow MassMutual’s lead, ”wrote JPMorgan strategist Nikolaos Panigirtzoglou.

Like Decrypt reported, Massachusetts Mutual Life Insurance Company recently buy $ 100 million worth of Bitcoin for its overall investment account that aims to have “a measured but meaningful exposure to a growing economic aspect of our increasingly digital world.”

Bitcoin is a cryptographically secure digital currency. Image: Shutterstock

This investment may be considered a milestone and a forerunner of things to come, Panigirtzoglou noted. He said that if pension funds and insurance companies in the US, UK and Japan move only 1% of their funds to Bitcoin, this would lead to $ 600 billion more institutional funds being allocated in the crypto.

Meanwhile, the total capitalization of Bitcoin’s “only” market is around $ 356 billion at today’s prices, according to CoinMarketCap.

JPMorgan’s suggestion comes on the backdrop of the growing interest in Bitcoin among institutional investors. For example, Raoul Pal, CEO of macro research and advisory service Global Macro Investor, asserted last week that Bitcoin, Ethereum, and other cryptocurrencies have the potential to absorb “trillions and trillions of value” from traditional markets.

Another of Bitcoin’s major selling points for large investors is its gold-like qualities. According to another report published by JPMorgan strategists last week, Bitcoin will probably break away on the value of gold as an investment vehicle in the coming years.

“Institutional investors have realized that Bitcoin has gold-like properties, as a limited supply,” Lucas Huang, head of growth of Tokenlon’s decentralized exchange, said tell Decrypt. “The more ‘traditional’ investors buy, the more established Bitcoin gets, and that’s what we’re seeing right now.”