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

Odaily Planet Daily News American foundations and university endowment funds are increasing their investment in cryptocurrencies and joining the digital asset craze. Austin University, which was established a year ago, is raising a $5 million Bitcoin fund for its $200 million endowment fund, the first such fund among endowments and foundations in the country. Last October, Emory University in Georgia became the first university endowment fund to disclose its Bitcoin ETF holdings. According to its chief investment officer, the $4.8 billion Rockefeller Foundation is considering increasing its investment in cryptocurrencies if its user base becomes more diverse after investing in a crypto venture fund two years ago. "We can't predict what cryptocurrencies will look like in 10 years," said Chun Lai, the foundation's chief investment officer. "When their potential is dramatically revealed, we don't want to fall behind." Cryptocurrency venture funds report that endowments and foundations that were on the sidelines a few years ago are 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 U.S. endowments and foundations were among the first institutional investors to embrace cryptocurrencies. Yale University’s endowment invested in two cryptocurrency venture funds in 2018, when bitcoin was less than a tenth of today’s price. Britt Harris, former chief investment officer of the $78 billion University of Texas/Texas A&M Investment Management, said the nation’s largest university endowment, under his leadership, made “a small number of experimental” investments in cryptocurrency venture funds in the early 2020s as a “potentially attractive future strategy.” Franklin Bi, general partner at Pantera Capita, said there has been a “seismic shift” in interest from endowments and foundations toward digital assets, which five years ago reported “extremely low engagement” in the space.   While cryptocurrencies still face significant challenges, from a lack of adopters 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 will hold its cryptocurrency portfolio, announced in May, for at least five years. Others are more cautious, such as Brian Neale of the University of Nebraska Foundation, who has no exposure to cryptocurrencies and does not plan to enter the space until more of his peers join and the regulatory framework becomes clearer. (FT)