Bitcoin (BTCUSD)

[Investors3]

169-Year-Old MassMutual Invests $100 Million in Bitcoin
By Olga Kharif
December 10, 2020, 3:15 PM EST Updated on December 10, 2020, 5:22 PM EST

https://www.bloomberg.com/news/articles/2020-12-10/169-year-old-insurer-massmutual-invests-100-million-in-bitcoin

Massachusetts Mutual Life Insurance Co. has purchased $100 million in Bitcoin for its general investment fund, the latest mainstream firm to dabble in digit assets.

The mutual insurer also acquired a $5 million minority equity stake in NYDIG, a subsidiary of Stone Ridge that provides cryptocurrency services to institutions, according to a statement. NYDIG, which already keeps more than $2.3 billion in crypto assets for clients, will provide custody services for MassMutual’s Bitcoins.

MassMutual, which has been around since 1851, is the latest company to invest in the largest cryptocurrency. MicroStrategy Inc. has expanded its investments into the coin, and Square Inc. has poured money into the world’s most popular cryptocurrency as well amid talk of growing institutional adoption and demand.

The investment in Bitcoin will represent 0.04% of the general investment account of nearly $235 billion as of Sept. 30, MassMutual said. “We see this initial investment as a first step, and like any investment, may explore future opportunities,” spokeswoman Chelsea Haraty said in a email.

Bitcoin has more than doubled in price this year, and hit an all-time high earlier this month. Advocates say that Bitcoin is a kind of digital gold, likely to retain its value during times of turmoil and as a hedge against inflation despite the historical volatility of the cryptocurrency.

MicroStrategy to Raise $400 Million to Buy Even More Bitcoin
By Kristine Owram
December 7, 2020, 5:00 PM EST Updated on December 8, 2020, 8:01 AM EST

https://www.bloomberg.com/news/articles/2020-12-07/microstrategy-to-raise-400-million-to-buy-even-more-bitcoin?srnd=cryptocurrencies

MicroStrategy Inc. is doubling down on its Bitcoin bet, saying Monday that it plans to offer $400 million of convertible bonds in order to buy more of the cryptocurrency.

The proceeds from the offering will be invested in Bitcoin “pending the identification of working capital needs,” the Virginia-based company said in statement.


MicroStrategy bills itself as a business-intelligence firm but has been doubling down on its capital-allocation strategy disclosed in July, which included investing up to $250 million in assets including Bitcoin.

MicroStrategy bought more of the cryptocurrency on Dec. 4, saying in a filing that it now has about 40,824 Bitcoins in total.

“We see the recent stock rally as overextended and see incremental risks to the story following an announced $400 million convertible note to fund even more Bitcoin purchases,” said Citigroup analyst Tyler Radke, downgrading his recommendation to a sell.

The stock has doubled since the beginning of November as the price of Bitcoin has also surged. Shares fell 4.8% premarket Tuesday.

Fidelity Digital to Hold Bitcoin as Collateral for Cash Loans
By Matthew Leising and Olga Kharif
December 9, 2020, 9:00 AM EST

https://www.bloomberg.com/news/articles/2020-12-09/fidelity-digital-to-hold-bitcoin-as-collateral-for-cash-loans?srnd=cryptocurrencies

Fidelity Digital Assets will allow its institutional customers to pledge Bitcoin as collateral against cash loans in a partnership with blockchain startup BlockFi.

The unit of Boston-based asset manager Fidelity Investments will hold the digital asset and not make loans itself, Tom Jessop, president of Fidelity Digital Assets, said in an interview. The target is Bitcoin investors who want to turn their digital stash into cash without selling, and potential customers include hedge funds, crypto miners and over-the-counter trading desks, Jessop said.

The new service from Fidelity comes after Bitcoin beat its 2017 highest price earlier this month before retreating in recent days. The world’s most valuable digital asset has risen 164% this year, hitting a high of $19,462 on Dec. 3. It traded Monday at about $18,880. Other cryptocurrencies like Ether and Litecoin have also seen gains.

Holding Bitcoin to back loans is “a foundational capability,” Jessop said. “As the markets grow, we’d expect that this becomes a fairly important part of the ecosystem.”

Fidelity said institutional-investor interest in digital currencies is rising. A survey the asset manager conducted earlier this year found 36% of respondents held crypto in their portfolios. More than six out of 10 expressed interest in Bitcoin and other cryptocurrencies, up from 47% in a 2019 survey.

Fidelity began a Bitcoin custody service last year but this is the first time it’s allowing the coins to be used as collateral. To get a loan, a Fidelity customer will have to have an account with BlockFi.

While Jessop said he envisions the loans to be longer-term than a typical repo trade, they’re still of a type -- a tri-party agreement -- that’s familiar to everyone on Wall Street. “We want to to develop a world-class brokerage capability for assets of all types,” he said.

Crypto is being accepted for more mainstream financial uses, such as Visa credit cards that offer Bitcoin rewards and PayPal Holdings Inc., which allows customers to use the digital asset at the 26 million merchants on its network.

BlockFi will risk-manage the famous volatility of Bitcoin by offering cash worth 60% of a loan backed by the digital asset, said Chief Executive Officer Zac Prince. “However, the program has room for client-level customization and may be adjusted to meet the needs of large firms,” he said.

— With assistance by Michael McDonald