U.S. endowment funds are increasingly diversifying their portfolios by incorporating cryptocurrencies, as reported by The Financial Times. This significant trend comes as digital assets reach unprecedented heights, capturing the attention of institutional investors.
Franklin Bi, a general partner at Pantera Capital, expressed that there has been a notable “huge shift” in the interest level of endowments and foundations towards digital assets. Just five years prior, many of these institutions reported having minimal participation in the cryptocurrency market. This dramatic change signifies a broader acceptance and recognition of the potential for substantial returns in the crypto space.
The most prominent cryptocurrency, Bitcoin (BTC), has experienced remarkable growth, soaring to approximately $97,900 from around $7,000 in 2020. A combination of factors has contributed to this surge, including the introduction of bitcoin exchange-traded funds (ETFs) and the election of crypto-friendly U.S. President Donald Trump. As Bitcoin’s price climbs, institutions face increasing pressure to invest to avoid missing out on this booming market.
Several prestigious academic institutions have recently made headlines with their forays into cryptocurrency. Emory University in Georgia announced in October that it holds millions in Grayscale’s Bitcoin ETF. Meanwhile, the University of Austin revealed plans in May to raise a $5 million bitcoin fund to augment its $200 million endowment. Additionally, the $4.8 billion Rockefeller Foundation is actively exploring opportunities to increase its cryptocurrency investments, having already committed to crypto venture funds in 2023.
Chun Lai, the chief investment officer of the Rockefeller Foundation, shared the organization’s perspective on the matter, stating, “We don’t want to be left behind when their potential materializes dramatically.” This statement underscores the growing urgency among institutions to engage with cryptocurrencies as they climb higher in public and investor interest.
The landscape of institutional investment in cryptocurrency is evolving rapidly, and it will be intriguing to observe how this trend develops in the coming years.
