Yale University has entered the cryptocurrency market.
Two separate reports suggest that the New Haven, Connecticut-based Ivy League institution has invested in two venture funds focused on cryptocurrencies and blockchain.
Yale Making Bet On Two Crypto-Focused Funds
Yale has the second-largest endowment among higher educational institutions globally.
According to a Bloomberg report, the university has invested an undisclosed amount of money in a new cryptocurrency-focused fund called Paradigm. The university did not release any details regarding this investment. Bloomberg cited an unnamed sourcethat did not want to be identified because the deal is private.
Paradigm was launched by Coinbase co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang, and Charles Noyes, a former employee of crypto fund Pantera Capital. The fund, which has secured an investment of $400 million, plans to bet on early-stage projects focused on cryptocurrencies, blockchain and exchanges. Paradigm is a newcomer in the crypto market and it has yet to even announce its existence.
Concurrently, CNBC reports that David Swensen, who is the chief investment officer of Yale’s $29.4 billion endowment, has made investments in two cryptocurrency-focused venture funds including Paradigm. Swenson, known as Yale’s Warren Buffet, also invested in Andreessen Horowitz’s $300 million crypto fund, according to anonymous sources.
Yale Entry May Be Good News For Disappointed Crypto Investors
Swensen manages Yale’s endowment. The university is among the few large institutions that are betting on cryptocurrency. Per Bloomberg, Yale plans to spend nearly 60% of its assets in fiscal 2019 for alternative investments including venture capital, hedge funds and leveraged buyouts, according to the school. The university’s endowment returned 12.3% for the year ending June 30, 2018. The endowment value increased from $27.2 billion on June 30, 2017, to $29.4 billion on June 30, 2018, according to the university.
The price of Bitcoin (BTC-USD) has fallen more than 50% this year, while the total market capitalization for all cryptocurrencies has plunged 63%, according to CoinMarketCap. Crypto enthusiasts believe that academic institutions’ entry into the cryptocurrency market could have a positive impact on the market as university endowments often manage a huge sum of money and primarily focus on investing in safe haven assets to earn profits on a long-term basis. So, a growing demand from these institutions for cryptocurrencies would be a signal that cryptocurrencies are a safe investment, at least relatively compared to the past.