While the so-called crypto winter was grappling the market, a lot of institutional endowments inclined towards crypto-related investments. As per a new survey published on April 12, 94% of endowments have been allocating to crypto-related investments throughout 2018.
Trade publications Global Custodian and The Trade Crypto conducted the study in Q4 2018, in partnership with blockchain security firm BitGo. The study surveyed 150 endowments, of which 89% of the respondents were reportedly based in the United States and the rest either in the United Kingdom or Canada.
The survey further indicated that endowments will purportedly continue to allocate investments to the new asset class, despite the widely-reported concerns around regulation, custody, and liquidity. Only 7% of respondents asserted that they anticipated any decrease in their allocations over the next year.
Jonathan Watkins, the managing editor at Global Custodian and The Trade, remarked on the results of the survey, stating that:
“All the talk over the past 18 months has been around when institutional investors will begin participating in cryptocurrency investments, but it turns out they had already arrived, in the form of endowment funds.”
The survey further revealed that 54% of respondents were directly investing in crypto assets, wherein 46% invests in various kinds of funds. Over the next 12 months, 50% revealed they expect to increase their crypto investments, with 45% anticipate that their allocations will remain at their current levels.
Furthermore, as per the survey, the endowments are seeking these top three characteristics when selecting crypto funds are the said fund comply with robust regulation, have sufficient capital flow and liquidity and offer account security. The Trade suggests that overall summary of endowment sentiment is cautious optimism in regard to the nascent asset class and cited one respondent’s belief that crypto “is the future of investing,” and others’ characterizations of the process as “a very wild ride” and “hair-raising.”
In February, the University of Michigan’s $12 billion endowment unveiled plans to bolster its investment in a crypto fund managed by U.S. venture capital firm Andreessen Horowitz. In fall 2018, reports surfaced that Ivy League titans Yale and Harvard have made a worthy investment in crypto funds. Reportedly, Stanford University, Dartmouth College, the Massachusetts Institute of Technology and the University of North Carolina have also made crypto investment.
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