Leading Universities’ endowment funds venture into crypto




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According to a report, 94% of endowment funds allocated to crypto-related investments through the course of 2018. Per the survey’s findings, 89% of these endowment funds are from the U.S, and the rest are from either Canada or the U.K. The endowments have continued investing in crypto despite regulation, volatility, and liquidity concerns in the crypto sector. This is a bold move as universities use endowment funds to finance their operations and future investments.

Prior to this, Cointelegraph unveiled that several Ivy League and other world-class universities had invested in at least one crypto fund. According to the report, Harvard University, Stanford University, Dartmouth College, Massachusetts Institute of Technology (MIT), and the University of North Carolina all have crypto investments. Their crypto endowment funds are estimated to be worth billions of dollars.

This move by leading universities and colleges shows the increasing acceptance of crypto among institutional investors. Endowments managers like investments that are safe to prevent loss of funds. Investors in the endowments are long-term minded. Their decision to invest in cryptocurrencies shows they believe the coins will have a lot of value in the future. Buying into crypto also shows endowment managers trust cryptocurrencies enough. This bold step by universities is significant for the crypto space as it will attract wall street investors to dip their toes in cryptocurrencies.

Crypto startups such as Ethereum and Ripple are also trying to hasten the process of making crypto mainstream. Ethereum launched blockchain facilities in the computing centers of universities. On the other hand, Ripple introduced blockchain research funds for universities and colleges.

Major cryptocurrencies preferred

However, these endowments do not invest in all crypto assets in the market. They prefer leading cryptocurrencies such as BTC, ETH, and XRP. Yale University unveiled that it had invested $400 Million in a crypto-related fund. Cointelegraph reported that Yale’s financial experts had created an in-depth analysis of the risk-return tradeoff on top virtual currencies based on their performance in the past.

Harvard’s, MIT’s, and Stanford’s endowments have not invested in crypto directly. They invest in crypto funds that are operated by other financial firms. This helps the endowments avoid some of the risks associated with crypto. This also provides a cushion between their portfolios and the volatility of the crypto market.

Factors preventing endowment funds from diving into the crypto space

According to Jim Kyung-Soo Liew, a researcher and an assistant professor of business, university endowment funds are in the crypto sector are under-allocated. He added that the reason behind this stunted growth is the negative press in the crypto sector. Institutional investors also dislike the fact that cryptocurrencies are primarily driven by speculation.

Do you think endowment funds investing in crypto will convince wall street investors to do the same? Let us know in the comments below.

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