Every great journey starts with a first step. In what can be called a chain reaction, major endowments of US-based universities have suddenly become very interested in cryptocurrencies after Yale University took the initiative by investing in two crypto funds. In the recent days endowments of Harvard, Stanford, MIT and two other major universities have invested in cryptocurrency funds, which suggests how this new asset class is becoming accepted among institutional investors.
This latest news was broken first by ‘The Information‘. Other universities besides these elite educational institutions to invest in cryptocurrency funds include Dartmouth College and the University of North Carolina. Citing information from an industry source in the knowledge of the matter The Information said in its report that these five universities have collectively invested tens of millions of dollars in some cryptocurrency funds. The funds that benefited from these investments will now use the money raised to invest in cryptocurrencies and crypto startups both.
It’s worth noting though that the exposure of these funds to cryptocurrencies is still at a minuscule level in comparison to the overall asset size of their portfolio. For example, Yale University, which controls the 2nd largest endowment in United States with assets worth $30 billion, seems to have invested less than $50 million in its two crypto fund investments. When calculated, this amounts to 0.16% of total assets controlled by the endowment of Yale. All these other universities might also have invested with similar kind of exposure towards cryptocurrencies.
Nevertheless, it’s still a good sign that university endowments are starting to take this cryptocurrency space seriously. Major crypto analysts and investors (i.e. Mike Novogratz) have already predicted long time ago that a herd of institutional investors will power the next bull run in crypto markets. Ari Paul, a cryptocurrency fund manager and former portfolio manager to University of Chicago’s endowment, had also said in April that a large number of institutions are already interested to invest in cryptocurrencies. They were all just waiting for someone to take the first step, and Yale took it.
Now it will be very interesting to see which other institutional investors walk into the shoes of these endowments and start investing in cryptocurrency funds. Research has already shown that a positive sentiment is emerging among these investors regarding the near-term prospects of Bitcoin, so let’s see what kind of numbers this sentiment brings in the coming days.