U.S. Endowments Embrace Crypto: A New Wave of Investment

U.S. endowments are increasingly turning their attention to cryptocurrencies, with a significant shift in interest from institutions that previously had minimal involvement in the digital asset space. This trend is evident in the growing number of universities and foundations that are allocating a portion of their funds to cryptocurrencies.

Franklin Bi, a general partner at Pantera Capital, noted that there has been a "huge shift" in interest in digital assets from endowments and foundations. Five years ago, these institutions reported minimal participation in crypto, but now they are actively exploring the potential of digital assets. Emory University, based in Georgia, disclosed in October that it had millions worth of Grayscale's bitcoin ETF. The University of Austin announced in May that it is raising a $5 million bitcoin fund to contribute to its $200 million endowment.

The surge in interest from U.S. endowments comes as the price of bitcoin, the largest cryptocurrency, has soared to new heights. Bitcoin has risen from around $7,000 in 2020 to about $97,900, driven by factors such as the introduction of bitcoin exchange-traded funds (ETFs) and the election of crypto-friendly U.S. President Donald Trump. Institutions are increasingly concerned about missing out on the potential growth of the crypto market.

The Rockefeller Foundation, which has a $4.8 billion endowment, is exploring whether or not to increase its exposure to crypto. The foundation invested in crypto venture funds in 2023 and is considering further allocations to the digital asset space. Chun Lai, the foundation's chief investment officer, told the Financial Times that they do not want to be left behind as the potential of cryptocurrencies materializes dramatically.

This trend reflects a broader shift in the investment landscape, as institutions increasingly recognize the potential of cryptocurrencies and blockchain technology. As the crypto market continues to grow and mature, it is likely that we will see more institutions allocating a portion of their funds to digital assets in the coming years.