The American multinational investment bank, JPMorgan Chase & Co, believes that bitcoin has grasped the attention of institutional investors, and further purchases will follow. The giant bank highlighted the recent $100 million BTC buy from the insurance company MassMutual as a significant turning point.
JPM: Institutions Are Yet To Double-Down On BTC
The global events that transpired following the COVID-19 outbreak rattled world economies. Whether this is the primary reason, or perhaps bitcoin’s maturation, or the halving, or something entirely different, the fact is that numerous large companies, prominent investors, and institutions began noticing and purchasing sizeable amounts of BTC.
One of the latest such market entrance came from the insurance giant – The Massachusetts Mutual Life Insurance Company (MassMutual). CryptoPotato reported that the Springfield, Mass-based firm bought $100 million in bitcoin.
JPM outlined the significance of this purchase in its latest report, cited by Bloomberg. The bank’s strategists asserted that MassMutual’s endorsement of BTC suggests “adoption of bitcoin is spreading from family offices and wealthy investors to insurance firms and pension funds.”
Although the paper believes that it’s unlikely for insurance firms and pension funds to “ever make high allocations,” it admitted that even small purchases could result in substantial market moves for the cryptocurrency.
“MassMutual’s bitcoin purchases represent another milestone in the bitcoin adoption by institutional investors. One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example.” – said the bank’s leading analyst Nikolaos Panigirtzoglou.
What Could Indeed Happen To BTC?
JPM’s document continued with examining the potential impact on bitcoin should pension funds and insurance companies indeed proceed with allocating funds in the asset.
The analysts said that even a relatively small purchase of 1% from such firms in the US, Europe, UK, and Japan would result in “additional bitcoin demand of $600 billion.”
It’s worth noting that such a considerable number is substantially higher than BTC’s current market capitalization of about $350 billion. Consequently, it would have a massive impact on the asset’s price, which could result in reaching some of the optimistic predictions for the following years.
Bloomberg analysts envisioned a market cap of $1 trillion next year and a price of $50,000 per bitcoin. Kraken’s Dan Held seemed even more confident, saying that even $288,000 is not out of the question.