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Stablecoin News of the Week Institutional investment

MassMutual buys BTC as MicroStrategy sees its stock recommendation downgraded

2020.12.12 Adam James

The week's biggest stories from the cryptocurrency world that you may have missed

It's been another eventful week in the cryptocurrency world. We've seen one institutional behemoth buy into BTC as another major player's aggressive purchases provoke a downgraded stock recommendation. Meanwhile, one country's regulators are seeking to crack down on crypto-to-crypto transactions while "Crypto Mom" calls for an embrace of blockchain's freedom principles.

Here's everything you might have missed on the blockchain and cryptocurrency news front this week, in this edition of OKEx Insights' Crypto News of the Week.

MassMutual invests $100 million into BTC

Massachusetts Mutual Life Insurance Co. has become the latest institution to join the Bitcoin bandwagon after investing $100 million into BTC and an additional $5 million into an equity stake in NYDIG, a Bitcoin-dedicated financial services firm with $2.3 billion under management.

Key takeaways

  • MassMutual's BTC purchase will provide it with direct exposure to the leading cryptocurrency and signals that the company expects other institutional players to follow suit.
  • The American mutual life insurance company is truly an institutional behemoth, with a 169-year history and $235 billion in its general investment account. Its newfound exposure to BTC will likely promote confidence in the digital asset among other institutional giants.

NYAG seeks to extend injunction against Tether

The ongoing legal drama between the New York Attorney General and cryptocurrency exchange Bitfinex has seen a new development this week following the former's claim that the latter has been cooperating and is expecting loan documents to be handed over in a matter of weeks.

Additionally, the NYAG is seeking to extend an injunction that would prevent Tether from loaning Bitfinex more funds until Jan. 15.

Key takeaway

  • Tether issues USDT, a UST-pegged stablecoin that is often referred to by the company's namesake. The current market capitalization of USDT is $19,949,725,669, according to CoinGecko, making it the leading stablecoin by a large margin. A negative outcome for Tether in the legal battle could send some serious shockwaves through the cryptocurrency market.
The market capitalization of USDT has skyrocketed in 2020. Source: CoinGecko

France set to decree crypto-to-crypto transaction regulations

France is looking to become one of the strictest crypto countries in the world by regulating crypto-to-crypto transactions, according to statements from French crypto association ADAN's president, Simon Polrot, and additional sources — all of whom confirmed the country's regulatory intentions to The Block.

Key takeaways

  • The new regulations would likely come via a decree, which circumvents parliamentary approval.
  • The primary driver behind the potential regulations are the country's recent experiences with terrorist attacks — which will do little to negate the ongoing stigma that associates cryptocurrencies' primary use case with money laundering and terrorist financing.

SEC commissioner calls for 'embrace' of crypto's freedom principles

U.S. Securities and Exchange Commissioner Hester Peirce — referred to by some in the cryptocurrency space as "Crypto Mom" — has once again reiterated her stance that regulators should seek to embrace the relatively new asset class. In a speech to the Federalist Society this week, Peirce said that they "should figure out a way to embrace the personal liberty principles undergirding it."

Key takeaway

  • Peirce remains an ally to the cryptocurrency space with her insistence that its underlying technologies enhance liberty and provide solutions to those with limited access to traditional finance — and that this should not simply be steamrolled by regulators.

MicroStrategy's aggressive BTC push causes downgraded recommendation

Citigroup analysts have downgraded their recommendation for MicroStrategy stock following the company's issuance of debt to purchase more BTC. A note from Citigroup to clients stated, according to The Block, that "the issuance of new debt to fund Bitcoin purchases is aggressive and might be a deal-breaker for software investors, who may fear they now own a more risky asset management business."

Key takeaways

  • Citigroup's downgraded recommendation provoked a double-digit selloff of MicroStrategy stock price.
  • MicroStrategy is one of the biggest players in the BTC investment space after purchasing more than 40,000 BTC in 2020 — a strategy that is reportedly not universally liked among the company's management.
MicroStrategy's stock price declined this week following Citigroup's downgraded recommendation. Source: Google

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.