Can Life Insurance Companies Invest in Cryptocurrency?

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Can Life Insurance Companies Invest in Cryptocurrency?

While millions of people have life insurance policies, most don't know much about what type of businesses and products they invest their money in. Owning crypto assets has become incredibly popular with people in the tech field and younger amateur traders, but many people still perceive it as too volatile to be a worthwhile asset for investment. One of the latest debates in the crypto sphere relates to its viability as an investment property for institutions like life insurance companies. Every country, citizen, and the individual insurer is asking the same question: Can life insurance companies invest in cryptocurrency?

Can life insurers invest in cryptocurrency?

Before you choose a life insurance policy, it's essential for you to understand everything about both the policy itself and the insurer you're working with. Life insurance is a serious investment that makes sense for many families in Australia and around the world, but it can be difficult to find an insurance company that you can trust. We all talk about comparing monthly premiums, but if you really want to get to know an insurer, you also need to look at where they invest their money.


can life insurance companies invest in cryptocurrency
can life insurance companies invest in cryptocurrency?

With cryptocurrency gaining wider adoption all around the world, many people have started to invest in it as a speculative asset. Though it started out as a niche currency for mostly online communities, crypto has developed into a legitimate factor in our global economic system. If you're interested in learning more about crypto investing on both an individual and organizational level, head over to Crypto Vantage. Still, the question remains: Can life insurance companies get into the market?

The answer depends entirely on where you live. Different countries have different rules about the types of stocks, bonds, and assets that insurance companies are allowed to use for investment purposes. In many countries, clear regulations on crypto investing don't even exist yet. So far, the United States is one of the only countries that has begun to commit to crypto investing in a large-scale way, but that doesn't mean the trend won't spread.


What are some examples of insurers with crypto investments?

Can Life Insurance Companies Invest in Cryptocurrency?
Can Life Insurance Companies Invest in Cryptocurrency?

So far, the trend of insurers investing in crypto assets seems to be strongest in the United States. Several U.S. insurers recently decided to try crypto investing, though they have done so indirectly. The six insurers invested in a digital currency vehicle offered by Grayscale Investments, LLC. The companies did not directly purchase crypto assets like Bitcoin or Ethereum directly, but they do derive their value from cryptocurrency by purchasing shares from Grayscale Bitcoin Trust and Grayscale Ethereum Trust.

A different insurance giant, MassMutual, went a step further. They recently revealed that they added $100 million worth of Bitcoin to their general investment account. While MassMutual isn't the only insurer working with crypto, they built their reputation on being conservative with their investments, only selecting tried-and-true financial products or assets that are considered investment-grade. Whether this will inspire other insurers and other countries to invest similarly remains to be seen.

As of right now, the question of whether or not life insurance companies can invest in crypto can't be answered with a simple yes or no. There are several countries where cryptocurrency is actually illegal and others, like the U.S., that have insurance giants investing hundreds of millions of dollars into Bitcoin. Only time will tell whether the choice to buy in on Bitcoin was the right one, but the whole world is watching the situation play out. It's clear that the next few years will be incredibly significant in determining what future role cryptocurrency will be allowed to play in the context of being an acceptable investment for life insurance companies.

 

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