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Insurance is my bread and butter and I wanted to share some thoughts about what this MassMutual news means for the crypto space. 
https://www.coindesk.com/massmutual-buys-100m-bitcoin-bets-on-institutional-adoption-with-5m-nydig-stake
https://www.coindesk.com/massmutual-buys-100m-bitcoin-bets-on-institutional-adoption-with-5m-nydig-stake
First some background: before @UpshotHQ, I spent nearly 2 years leading blockchain development at John Hancock and Manulife. We created the first significant public blockchain project done by any major insurance incumbent at the time.
Getting the c-suite of a leading insurance company to get behind a public blockchain project when none of their peers would touch it, during a crypto bear market teaches you a lot about how big institutions think about emerging technology.
Before we get into that, let’s unpack the good of MassMutual getting into the space (and, soon, many of their peers): Insurance is an incredibly well-capitalized industry. It makes up the second largest pool of capital behind pension funds. There’s a ton of money in insurance.
Moving even a fraction of that capital into the crypto space is a massive (and imo necessary) step towards the next level of adoption for crypto. It brings legitimacy, trust, liquidity, market depth, jobs, better products, you name it. There are a lot of pros.
There are reasons to be wary though: 1. insurance companies are some of the most risk-averse companies in the world (by design) and their capitalization means they have real sway to make changes when something is happening that doesn’t match that level of risk aversion.
This is different than Square or Paypal entering the space. Tech companies' levels of risk aversion and the insurance industry's level of risk aversion are night and day.
2. Partly as a result of that risk aversion, insurance companies rarely move into industries alone - no one wants to be first. Someone like MassMutual entering the space in the way they are means more insurance companies are close behind.
When multiple massive, reputable companies enter an emerging market in close succession (giving it their “stamp of approval”), a swell of new people are going to enter the space too. This means that a lot of people are going get hurt, lose money, etc.
If we thought regulations seemed misguided/overbearing now, just wait until the most risk-averse, well-capitalized companies in the world are lobbying for swift (likely misguided) regulations to be put in place.
I’m not saying more regulation is bad. I’m in favor of more regulation in general. I’m saying that money, brands, reputations, etc. at the scale we are talking about guiding rushed regulations into law could slow crypto down for years, maybe decades.
Laws are written in ink. They’re easy to write down, but hard to erase.
With all that said, I do think it’s a big step to see companies like MassMutual entering the space right now. It’s a huge positive signal for the industry. But it also means more eyes will be on it than ever and the consequences of slip ups will be much more severe.
