New institutional player: MassMutual bought $100 million in Bitcoin
12. Dezember 2020
The company reportedly hopes to achieve „measured but significant exposure to a growing economic aspect of our increasingly digital world.
MassMutual, a Massachusetts-based insurance company, has just announced that it has purchased $100 million in Bitcoin for its general investment account.
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According to a news report in The Wall Street Journal, the company bought the coins, allegedly 5,470 Bitcoin (BTC) at the current price of $18,279, through the New York-based fund management company, NYDIG. MassMutual apparently also bought a $5 million stake in the company, which holds $2.3 billion in crypt coins.
MassMutual told Cointelegraph that the investment is part of a larger strategy, with the goal of achieving „measured but significant exposure to a growing economic aspect of our increasingly digital world. The company clarified that:
„Our $100 million investment in Bitcoin through NYDIG will represent 0.04%, or less than one tenth of the %, of our overall investment account.
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The purchase comes at a time when major institutional players are adopting Bitcoin for the first time and making a long-term commitment to investments in cryptosystems. In September, the business intelligence company MicroStrategy bought more than $425 million in Bitcoin to make it its main reserve asset. Earlier this week, the company announced that it would invest the proceeds of a $400 million stock offering to buy more Bitcoin.
MassMutual told Cointelegraph that the company is overseeing more than $235 billion in its overall investment account by September 30.
This report identifies 18 „non-financial risks“ to DeFi
Beyond the obvious financial risks, there are a number of technical risks that DeFi users should be aware of.
A November report by data and research firm BraveNewCoin has highlighted a number of serious „non-financial“ risks in decentralized finance.
The financial risks involved with DeFi have been well documented, but the new report delves into more technical concerns associated with Ethereum-based smart contract finance protocols.
The report, written by BNC analyst Xavier Meegan, begins with the scalability risks that anyone who dealt with DeFi in September of this year will be familiar with. Network congestion resulting in high gas rates and failed transactions can cause DeFi protocols to malfunction or not function as intended.
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During the height of the yield frenzy, Ethereum’s average transaction rates shot up to record highs of around $15. The report cited the Black Thursday event as an example;
„The report cited the Black Thursday event as an example; „We saw this happen on Black Thursday in March 2020, when MakerDAO players (liquidators) were unable to access the auctions to bid on the warrants, resulting in the warrants being sold for free.
Numerous smart contract vulnerabilities were cited, including the re-entry risk that occurs when a contract sends ETH before updating its internal status. The $25 million dForce attack in April is an example of a re-entry exploit.
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Urgent loans (where assets can be borrowed and repaid within the same transactions) can take advantage of this, with notable examples this year including bZx, Opyn, Harvest Finance, and most recently Pickle Finance.
Oracles also pose a risk, as a smart contract can receive misleading or inaccurate information about out-of-chain securities or asset prices due to manipulation of information by the vendor or a malicious agent.
The design of the protocol can pose a risk if it can be manipulated to benefit cyber-crooks. Composability is a good example of this, as a DeFi protocol needs to be supported by another protocol to work. The report indicated that the concept of „Lego of money“ interconnectivity within the ecosystem opens it up to greater risk;
„The current interconnectivity of DeFi is extremely similar to that which existed before the global financial crisis (GFC) in 2007-08.