While the Covid-19 pandemic impacted most industries negatively, the crypto sector has gone from strength to strength with more investors and even celebrities investing in assets such as Bitcoin, Eth and XRP.
It’s easy to see why cryptocurrencies are booming as investment solely in Bitcoin is up 278.6% in the last 12 months. Investors in crypto aren’t limited to entrepreneurs and fintech enthusiasts. Now, top tier universities in the likes of Harvard, Yale, Brown and University of Michigan have been the newest addition to the list, according to a report by CoinDesk.
“[A] lot of endowments are allocating a little bit to crypto at the moment,” with aforementioned institutions investing since “at least a year,” the CoinDesk report said.
“It could be since mid-2019,” the source added.
“I would think they will probably discuss it publicly at some point this year. I suspect they would be sitting on some pretty nice chunks of return.”
According to the report, Yale, Brown, Harvard and University of Michigan declined to comment at the time of writing.
Will Uni endowments support research in crypto?
University endowment funds buying cryptocurrency through Coinbase and other exchanges might have a massive impact on the sector escalating the number of potential researchers in the subject.
To put simply, university endowments essentially are large amounts of capital amassed by academic establishments, most of which come in the form of charitable donations. These funds are spent to support further teaching and in-depth research.
To break it down, Harvard’s endowment boasts of over $40bn in assets, while Yale over $30bn and Michigan holds circa $12.5bn. While the exact amount allocated to crypto is unknown, it’s likely that it might be a good percentage of their total assets.
Academics back crypto
In October 2018, Yale pumped in $400 in Paradigm, a fund launched by Fred Ehrsam from Coinbase and Matt Hang from Sequoia Capital.
These universities investing in crypto motivated a host of other institutions to follow suit. Universities including Stanford, Dartmouth College, MIT, University of North Carolina and Michigan are too investing in crypto assets.
A source told CoinDesk: “We are seeing defined benefit pension plans getting close to making allocations. We are seeing public pension plans getting close to making allocations.”
In a previous interview, co-founder of BlockTower Capital and former investment manager for the University of Chicago admitted: “If I had heard that three years ago, I would have said it was wrong.
“But a lot of institutions are now comfortable with bitcoin. They understand it and can just buy it directly, as long as it’s from a regulated entity like Coinbase, Fidelity or Anchorage.”
