US Insurers Invested $3 Million in Grayscale’s Crypto Trusts in Q1 2020

US Insurers Invested $3 Million in Grayscale’s Crypto Trusts in Q1 2020

In brief

  • Six US insurers have invested in crypto products offered by Grayscale during Q1 of this year.
  • In December 2020, MassMutual, another insurance firm, made a $100 million bet on Bitcoin.
  • Six US insurers bought shares in Grayscale’s crypto trusts in the first quarter of 2021, according to financial analytics firm S&P Global. Combined, their investments amount to about $3.1 million.

    The investors bought shares in the Grayscale Bitcoin and Ethereum Trusts. These are publicly-traded trusts that use investors’ money to buy crypto.

    They are sort of like an actively-managed exchange-traded fund—and the closest thing to one in the US; the SEC has rejected previous applications and has not approved those currently under consideration.

    Institutional investors often prefer to invest in Grayscale’s trusts rather than Bitcoin or Ethereum itself. That’s because Grayscale handles the buying and storage of the crypto, and its trusts are registered with the SEC.

    The six insurers are Grinnel Mutual, Donegal Mutual Insurance, State Mutual Insurance, Safeway Insurance, Westfield Insurance, and Fidelio Insurance.

    All are based in the US, although none of their investments have matched MassMutual—another insurance firm—that made a $100 million bet on Bitcoin in December 2020.

    How did the insurers invest in crypto?

    The six insurers mostly invested in Bitcoin through the Grayscale Bitcoin Trust, or GBTC.

    Grinnel Mutual led the way, buying 18,000 GBTC shares for approximately $968,000. Donegal Mutual Insurance followed closely, buying 20,000 shares of GBTC, worth just over $900,000 at the time.

    State Mutual Insurance was the only insurer to buy shares in Grayscale’s Bitcoin and Ethereum Trusts. The Georgia-based insurer bought 13,000 shares of the Bitcoin Trust, and 9,000 shares of the Ethereum Trust, for about $491,000 and $141,500 respectively. It bought the most shares in the Ethereum trust out of any of the six insurers.

    Safeway Insurance bought just under $400,000 of GBTC, and Westfield Insurance slightly less than $200,000. Fidelio Insurance invested less than $50,000 in the Grayscale Ethereum Trust. It was the only insurer to invest exclusively in Ethereum.

    Source