Investment Giants Buying Bitcoin
Bitcoin in 2020 has made one of the best returns on investments of any asset class. Had you bought it at $10k in September 2020 it has now more than doubled in just 3 months. As of today it is currently over $23k.
I shared my portfolio with beta testers back in May and explained that I was buying BTC at $8130.
That I was convinced it would more than double within 12 months.
I then shared my plans with members on the 28th October with a revised target of $26.000 within 12 months.
It’s almost there after 10 weeks!
If you have missed out thus far, don’t worry I believe it will double yet again with the next 12 months and possibly a lot sooner.
Why?
There are many why the price broke the $20k mark and made new highs. One of them was because of the policy of the Federal reserve & many other central banks of how they will tackle the issues they are facing during the pandemic. Their solution is to print as much fiatmoney as they can to save the economy.
This of course questions the real value of the US dollar and whether is it actually a safe-haven currency.
If you can actually just print as much as you like?
Scott Minerd, CEO of Guggenheim Investments said recently that they “will be investing 10% of their macro fund in bitcoin.”
He said, “Clearly, bitcoin, and our interest in bitcoin, is tied to Fed policy and the rapid money printing that’s going on.”
Guggenheim Investments has more than $230 billion in assets under management.
They are still waiting for U.S. Securities and Exchange Commission (SEC) to give the approval.
His comments were very significant just like the other investment company CEOs who have talked about the FED policy.
Clearly, this will gain a lot of people’s attention as Bitcoin has been in the media a lot lately which will make them rethink about the US dollar as a reserve currency.
Following the above he also made another big statement saying that according to their fundamental analysis bitcoin was worth $400k!
“Having said that, our fundamental work shows that bitcoin should be worth about $400,000.” Scott Minerd When he was questioned regarding how he came to this price conclusion he answered saying, “It’s based on the scarcity and relative valuation to things like gold as a percentage of GDP.
Bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of transaction.” He also said they will eventually buy bitcoin soon as the SEC approves it, but for now they will watch the market.
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Furthermore, Insurance giant MassMutual bought $100 million worth of Bitcoin for its general investment account. It has more than $275 billion assets under management. While this represents only 0.04% of their general investment fund, it is a big step for institutional adoption of Cryptocurrency.
They Purchased the crypto currency through New York Digital Investment Group (NYDIG) and took a $5 million minority equity stake in the fund management outfit. The company provides financial products such as life insurance, long term care insurance, disability income insurance, retirement/401(k) plan services, and annuities.
In their press release statement they mentioned the investment gives it a “measured yet meaningful exposure to a growing economic aspect of our increasingly digital world.” MassMutual CEO Roger Crandall told recently that the firm’s investment portfolio was geared toward a “long-term approach” and mainly consisted of investment-grade fixed-income instruments, real estate, and equities.
Why is this of major significance?
One of the principals of MassMutual is that it is a conservative investor, meaning it only makes investments in tried-and-tested financial products or those that are investment grade. Secondly, this could make the other mutual and pension funds look at their decision and gain confidence in investing a percentage of their funds into Bitcoin.
According to the note from the JPMorgan strategists, allocation of just 1% of funds from pension companies and insurance companies in the United States, United Kingdom, and Japan would move $600 billion of institutional funds into cryptocurrencies. At current valuations, that amount represents almost the entire market capitalization of cryptocurrencies today.
The above is significant as Bitcoin will only have $21million coins distributed creating already a scarcity in the market which could really drive the price as there will be less supply than demand.
References:
https://www.investopedia.com/decoding-insurance-giant-massmutuals-bitcoin-investment-5092586
https://www.bloomberg.com/news/articles/2020-12-16/guggenheim-s-scott-minerd-says-bitcoin-should-be-worth-400-000
https://news.bitcoin.com/guggenheim-investments-bitcoin-worth-400000-scarcity-relative-valuation-to-gold/
https://www.coindesk.com/guggenheim-cio-bitcoin
https://www.machinatrader.com/insurance-giant-massmutual-invests-100-million-in-bitcoin/
https://nairametrics.com/2020/12/11/insurance-giant-massmutual-buys-100-million-worth-of-bitcoin/
