Bitcoin investment firm NYDIG raised $50 million in October, quadrupled its clients and life insurance company MassMutual purchased a minority stake in the firm.
This came about because bitcoin is transitioning to a predominantly institution-owned asset, according to NYDIG CEO Robert Gutmann.
MassMutual made a $5 million equity investment in NYDIG last December, as well as a $100 million bitcoin investment for its general investment account through NYDIG. On today's episode of The Scoop, Gutmann said this event could open the floodgates for insurance giants to get in on bitcoin.
“You are going to see a lot of dominoes fall after this," he said.
Based on the set of macro circumstances 2020 presented, insurance companies are starting to question whether they can go forward only buying corporate credit to make good on policies, according to Gutmann.
"Over some number of years, it's hard for me to imagine it is not all of them [investing in bitcoin]," he said. "If MassMutual can get there from a diligence perspective so can the next one...It's definitely coming."
He also sees publicly-traded companies following in the footsteps of Square and MicroStrategy. Both firms allocated a portion of their balance sheets to bitcoin.
In Gutmann's view, these companies have a "fiduciary duty to consider whether holding 100% of your assets in dollars is in the best interest of your shareholders."
"Reasonable people can have different opinions about that, but I personally don’t think only Jack and only Michael and no one else is going to do a cold analysis of that and not come to that conclusion," he said.
On today's episode of the Scoop, Gutmann also touched on:
- Why he expects more insurance companies will enter the crypto space over time
- How the MassMutual deal came to be
- Why public companies are interested in bitcoin and how the adoption narrative for public companies is similar to that of insurance firms
- Why his institutional clients are only interested in bitcoin
- NYDIG's M&A strategy.
Listen to today's episode on Apple, Spotify, Google Play, Stitcher or wherever you listen to podcasts.
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