Bitcoin has drawn a lot of attention with its current rally. 2020 has seen a significant rise in institutional presence within the cryptocurrency market. Several major names like MicroStrategy have already picked up Bitcoin at considerably cheap prices and now, reports suggest that some of America’s largest universities are buying cryptocurrencies for their multibillion-dollar endowments.
According to a report from Bloomberg, major universities like Harvard, Yale, Brown University, and the University of Michigan have been buying digital currencies from exchanges for their endowments, which traditionally comprises of money or other financial assets. In some cases, it could cryptocurrencies that have been donated to academic institutions.
University endowments did get a single mention in Coinbase’s annual report for 2020, but without revealing any names.
Bloomberg cited an anonymous source representing Crypto exchange Coinbase who has revealed that some of its clientele include endowments that have been investing in cryptocurrencies on the platform.
When asked about when these investments started, the source said:
“It could be since mid-2019. Most have been in at least a year. 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.”
Harvard’s is the largest university endowment with over $40 billion in assets, while Yale has over $30 billion, Michigan has about $12.5 billion, and Brown holds $4.7 billion. There is, however, no information about how much each of these funds has allocated in crypto. It’s highly likely that it is going to be a small portion.
Crypto and the Ivy Leauge
Previously, Several Ivy League endowments have taken an interest in blockchain technology via crypto-focused venture capital funds in 2018. Yale University Chief Investment Officer David Swensen was in the spotlight for backing two crypto-focused venture funds, one run by Andreessen Horowitz and the other launched by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang.
Other universities like Harvard, Stanford, Dartmouth College, MIT, University of North Carolina and Michigan, followed Yale into backing crypto VCs. These very schools seem to have now taken a deeper interest in crypto.
The report also cited another source coming from the crypto hedge fund market that said there is a “big change” that the reports are true.
“We are seeing defined benefit pension plans getting close to making allocations. We are seeing public pension plans getting close to making allocations,” he added.
Meanwhile, Ari Paul, co-founder of BlockTower Capital, added that “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.”