Several members of the prestigious Ivy League have made investments into crypto, suggesting that institutional investors are finally starting to warm up to the nascent asset class. According to a report by The Information, the endowments of Harvard University, Stanford University, Dartmouth College, Massachusetts Institute of Technology and the University of North Carolina have invested into at least one cryptocurrency fund.
An undisclosed source has also revealed the endowments of the respective universities have invested tens of millions of USD into the crypto funds. All of the aforementioned institutions place in the top 25 of the wealthiest American colleges, with Harvard being a clear frontrunner with an endowment of $36 million, leading Yale by almost $9 billion. Even though those tens of millions invested into crypto represent only a fraction of the overall endowment, it could be a sign that a number of high-profile investors are ready to enter the market.
Endowments are essentially donations to the university, which are used to pay salaries, fund research, financial aid, etc. They are meant to provide additional income for future expenditures and typically endowment funds stick to buying traditional stocks or government bonds to ensure stability, rather than chase bigger profits. However, that has not always been the case, as Harvard and Yale endowments have suffered significant losses in the economic crisis of 2008 due to exposure on private equity and real estate.
The Information’s Jon Victor claims that, “A move by endowments into funds that will directly bet on cryptocurrencies signals a major shift in investor sentiment toward the asset class, in the same way that institutions over the past decade became more willing to invest in private tech companies. Backing from such closely watched institutions could help validate cryptocurrencies, which are still considered too risky by many institutional investors.“
Earlier this month, Toshi Times has reported that Yale invested a portion of their $27 billion endowment into two crypto funds: a $400 million Paradigm fund, headed by Coinbase co-founder Fred Ehrsam and the $300 million Andreessen Horowitz’s a16z fund.
The institutional investor entrance into the digital market has been a long-awaited one and hopefully the leading education institutions will open the gates to Wall Street giants who are still wary towards virtual currencies. Back in April, Ari Paul, a former portfolio manager at the endowment of University of Chicago, claimed that many institutions are interested in crypto but are waiting for the big names to invest, to have an “excuse” to follow suit. It doesn’t get much bigger than Harvard or Yale in terms of education and we can only hope more institutionals will join the fray.
Even though institutions are often considered more conservative than retail investors, a recent Fundstrat survey has shown that they are actually more bullish on the short-term BTC prospects than the crypto community.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.