U.S. foundations and university endowments join cryptocurrency craze, seek to build Bitcoin portfolios

Odaily reported that American foundations and university endowment funds are increasing their investments in cryptocurrencies, joining the digital asset craze. The one-year-old University of Austin is raising a $5 million Bitcoin fund for its $200 million endowment fund, which is the first such fund among university endowments and foundations in the country. In October last year, Emory University in Georgia became the first university endowment fund to disclose Bitcoin ETF holdings. According to its chief investment officer, the $4.8 billion Rockefeller Foundation is considering increasing its investments in cryptocurrencies if its user base becomes more diversified after investing in crypto hedge funds two years ago. "We can't predict what cryptocurrencies will be like in 10 years," said Chun Lai, the foundation's chief investment officer, "when their potential is rapidly emerging, we don't want to fall behind." A report on crypto hedge funds said that endowment funds and foundations that were still on the sidelines a few years ago are now pouring in a lot of money. Pantera Capital, a leading venture capital fund focused on digital assets in California, has seen an 8-fold increase in the number of its endowment and foundation clients since 2018. Leading US endowment funds and foundations are among the first institutional investors to embrace cryptocurrencies. Yale University's endowment fund invested in two crypto hedge funds in 2018, when Bitcoin was less than a tenth of its current price. Britt Harris, former chief investment officer of the $78 billion University of Texas/Texas A&M Investment Management Company, said that under his leadership, the largest university endowment fund in the US made "small experimental" investments in crypto hedge funds in the early 2020s, seeing it as a "potentially attractive future strategy." Franklin Bi, a general partner at Pantera Capital, said that endowment funds and foundations have undergone a "huge transformation" in their interest in digital assets, with these institutions reporting "extremely low" involvement in the field just five years ago. Although cryptocurrencies still face major challenges from lack of adoption to policy uncertainty, some endowments believe in the long-term value of digital assets. Chad Thevenot, senior vice president of development at the University of Austin, said the endowment fund will hold its crypto investment portfolio announced in May for at least five years. Others are more cautious, like Brian Neale of the University of Nebraska Foundation, who has not touched cryptocurrencies and does not plan to enter the field until more peers join and the regulatory framework becomes clearer.