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6 Insurers Initiate New Cryptocurrency Investment Positions: Report
Insurance firms have been increasing their interest in crypto investments since December.
Updated Sep 14, 2021, 1:11 p.m. Published Jun 15, 2021, 1:30 a.m.
Make us preferred on GoogleSix large insurers acquired shares of cryptocurrency investment products offered by Grayscale Investments, according to an S&P Global Market Intelligence report.
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The insurers didn’t directly purchase bitcoin or another cryptocurrency, but the investment products derive their value from shares of Grayscale Bitcoin Trust or Grayscale Ethereum Trust. Grayscale is a unit of Digital Currency Group, CoinDesk's parent company.
Investors can buy shares in a private placement transaction and then sell them on the secondary market following a holding period. Retail and institutional investors can then buy shares on the over-the-counter market. The trusts use published CoinDesk indexes to track cryptocurrency prices.
Grinnell Mutual Reinsurance and Donegal Mutual Insurance, a subsidiary of Atlantic States Insurance, made their first moves in February, purchasing 18,000 and 20,000 shares, respectively. Grinnell paid $968,000 for its shares.
Georgia-based State Mutual Insurance Co. was the only insurer to initially purchase shares of both the bitcoin and ethereum investment products. The mutual insurer acquired 13,000 shares of Bitcoin Trust and 9,000 shares of Ethereum Trust for about $491,000 and $141,500, respectively.
Read more: MassMutual Buys $100M in Bitcoin, Bets on Institutional Adoption With $5M NYDIG Stake
Insurance companies have recently ramped up their interest in cryptocurrency investments. In December, Massachusetts Mutual Life Insurance Co. purchased $100 million of bitcoin and made a $5 million equity investment in New York Digital Investment Group LLC.
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‘Bitcoin to zero’ searches spike in the U.S., but the bottom signal is mixed
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- U.S. searches for “bitcoin zero” on Google hit a record high in February as BTC slid toward $60,000 after hitting a peak in October.
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- Similar U.S. search spikes in 2021 and 2022 coincided with local bottoms.
- Because Google Trends measures relative interest on a 0-to-100 scale amid a much larger bitcoin user base today, the latest U.S. spike signals elevated retail anxiety, but does not reliably guarantee a clean contrarian reversal.
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