While crypto winter was affecting the market, many institutional endowments were inclined to crypto-related investments. A new survey released April 12 shows that 94% of institutional endowments allocated crypto-related investments to their portfolios throughout 2018.
The study was conducted by Trade publications Global Custodian, The Trade Crypto and BitGo in partnership with the blockchain security firm BitGo. 150 endowments were surveyed. 89% of respondents were from the United States, while the rest were either from the United Kingdom or Canada.
In spite of widespread concerns about regulation, custody and liquidity, the survey indicated that endowments would continue to allocate investments for the new asset class. Only 7% of respondents said they expected a decrease in allocations over the next one year.
Jonathan Watkins (Managing Editor at Global Custodian & The Trade) commented on the survey results, saying that:
“All of the talk in the last 18 months was about when institutional investors would begin investing in cryptocurrency. But it turns out that they already have, in the form endowment funds.”
Further, 54% of respondents invested directly in crypto assets while 46% invest in different types of funds. Half of respondents indicated that they expected to increase their crypto investments over the next twelve months. Only 45% expect their allocations to remain at current levels.
The survey also revealed that endowments want these top three characteristics in crypto funds when choosing them. These include robust regulation, sufficient capital flow and liquidity, and account security. The Trade indicates that endowment sentiment overall is cautious optimism regarding the new asset class. It cited one respondent’s belief in crypto as the future of investing, and other responses’ descriptions of the process being “a very wild ride” or “hair-raising.”
The University of Michigan’s $12B endowment revealed plans to increase its investment in a crypto-fund managed by Andreessen Horowitz, a U.S. venture capital company. Reports surfaced in fall 2018 that two Ivy League giants Yale as well as Harvard had made worthwhile investments in crypto funds. According to reports, Harvard University, Dartmouth College and the Massachusetts Institute of Technology have all made crypto investments.
