From观望to acceptance: U.S. university endowments embrace cryptocurrency
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From观望to acceptance: U.S. university endowments embrace cryptocurrency
Endowments and foundations became among the first institutional investors to accept cryptocurrency.
Navigating Web3 tides with focused insightsCompiled by: Felix, PANews
In recent years, amid the growing cryptocurrency boom, some investors have recognized the potential to expand their digital investment portfolios. Endowments and foundations that were on the sidelines just a few years ago are now adopting a more open attitude toward investing, becoming among the first institutional investors to embrace cryptocurrencies.
Pantera Capital, a California-based venture fund focused on digital assets, reported that since 2018, its client base of endowments and foundations has grown eightfold.
Endowments are designed to provide funding for nonprofit institutions such as hospitals, churches, or universities. University endowments represent pools of capital accumulated by academic institutions, typically in the form of charitable donations. These funds support teaching and research and can be allocated across various assets for investment purposes.
Recently, the one-year-old University of Austin is raising a $5 million bitcoin fund for its $200 million endowment—the first of its kind among U.S. endowments and foundations.
The University of Austin aims to implement a five-year Bitcoin holding strategy. Chad Thevenot, vice president of the university, said, “We believe Bitcoin has long-term value, just as we believe stocks or real estate have long-term value.”
Last October, Emory University in Georgia became the first university endowment to disclose its holdings in Bitcoin ETFs. According to a filing submitted to the U.S. SEC, the university holds nearly 2.7 million shares of Grayscale's Bitcoin Mini Trust, valued at over $15 million, along with 4,312 shares of Coinbase stock.
In 2018, Yale University’s endowment invested in two cryptocurrency venture funds when Bitcoin was worth less than one-tenth of its current price—one managed by Andreessen Horowitz (a16z), and the other by Paradigm, founded by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang.
Moreover, according to sources, some of the largest university endowments in the United States appear to have quietly purchased cryptocurrencies through accounts on Coinbase and other exchanges, including Harvard University, Yale University, Brown University, the University of Michigan, and several others.
Britt Harris, former chief investment officer of the University of Texas/Texas A&M Investment Management Company (managing $78 billion in assets), said under his leadership, the largest U.S. university endowments made “small experimental” investments in cryptocurrency venture funds in the early 2020s, viewing it as a “potentially attractive future strategy.”
Additionally, Lai from the Rockefeller Foundation stated they would consider increasing investments in crypto if the user base of cryptocurrencies “expands and deepens.”
Beyond university endowments, cryptocurrencies are also gaining popularity among pension funds, indicating a shift in mindset among younger generations.
Pension funds in states like Wisconsin have previously reported holdings in Bitcoin ETFs. Furthermore, Jersey City’s municipal pension plan in New Jersey announced it will allocate 2% of its assets to ETFs.
According to a Bitget Research report, up to 20% of Gen Z and Alpha generations are willing to receive retirement savings in cryptocurrency. 78% of respondents indicated greater trust in “alternative retirement savings options” compared to traditional pension funds, highlighting a significant shift toward “decentralized finance and blockchain-based solutions.”
Notably, some remain cautious about “following the trend” in such investments.
Cornell University professor Eswar Prasad said: “I am very concerned about institutional investors moving into financial assets that are essentially purely speculative, which offer little hedging value relative to other risky assets.” “Bitcoin appears to move in tandem with other risk assets like equities, but with much greater volatility.”
Brian Neale of the University of Nebraska Foundation believes that due to low adoption rates of cryptocurrencies among allocators, he does not view crypto as an “institutionally investable” asset class. He currently has no plans to enter this space until more peers participate and regulations become clearer. He also calls for greater regulatory transparency, such as guidance from the U.S. SEC on cryptocurrency investments, to bring order to the industry.
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