In a vote of long term confidence for cryptocurrencies, broker dealer MassMutual Life Investors Services (MMLIS) announced it has entered a placement agent agreement with NYDIG for a Bitcoin fund.
“MassMutual continues to believe that cryptocurrencies are increasingly becoming part of the financial landscape and is working on a number of initiatives to better serve its clients and financial professionals,” the firm writes in a statement.
The fund is expected to be available next week to select MMLIS financial professionals and their qualifying clients.
“MMLIS saw a growing demand from our financial professionals and their clients to gain Bitcoin exposure,” says Daken Vanderburg, head of investments, in the statement. “This offering with NYDIG is yet another step to continue to expand our product shelf with the goal of ensuring our financial professionals and clients have the tools they need to continue to build broadly diversified portfolios.”
Ric Edelman, cryptocurrency advisor and board member of Edelman Financial Engines, says MassMutual’s Bitcoin fund is the latest example of how Bitcoin and digital assets are becoming mainstream.
“The fact that MassMutual has done so puts additional pressure on the rest of the financial services industry to do likewise,” he says. “In a fairly short period of time, this will become commonplace.”
“Every firm in the financial services industry, from broker dealers to mutual fund companies to banks to insurance companies, will all be making this asset class available to their clients. It's great news, not just for the financial services industry, but also to their advisors, and most importantly to their clients who desperately need not only exposure to this asset class, but the guidance and support of the advisory community who can help them make the best decisions for their circumstances,” Edelman says.
Tyrone Ross, CEO on Onramp Invest, says a Bitcoin fund is an easy and accessible way to get exposure to Bitcoin, but he would not personally recommend it.
“It's almost like the fast food version of Bitcoin. I pull up, you give it to me, I pull off. I don't have to cook it, I don't have to check the temperature and all that other stuff. I don't know if this is the best way,” he says. “I believe in holding the underlying and buying it directly. That doesn't mean that the fund is not a good structure for some people — MassMutual's clients are not our clients — but I'm not a big fan of the fund structure with Bitcoin. I don't think you take something so beautiful and elegant and decentralized and put it in a product.”
Last year, MassMutual made a $5 million equity investment in NYDIG, a provider of institutional investment and technology solutions for Bitcoin, and a $100 million investment in Bitcoin for its general investment account in a transaction facilitated by NYDIG, the firm says.
At the time, Robert Gutmann, co-founder and CEO of NYDIG, said MsssMutual’s equity investment “underscores NYDIG’s role as the leading provider of Bitcoin solutions to institutions, banks, and private clients. It also accelerates our white-label business segment, which provides bespoke implementations of our core custody, execution, financing, and AML/KYC capabilities to a rapidly expanding group of large financial institutions.”
