The Ivy League school, Yale University has been infamous for their diversified investment portfolio including alternative assets, from real estate to hedge funds. Diversifying it further, the 317-year old university makes a leaping jump on the cryptocurrency wagon.
Yale, the second-largest endowment in higher education has invested in Paradigm fund, which focuses on cryptocurrencies, blockchain technology, and coin exchanges, as reported by the Bloomberg News. Reportedly, the university was one of the investors that have helped the fund to raise $400 million. Paradigm fund is launched by Coinbase Inc. co-founder Fred Ehrsam, Matt Huang, former Sequoia Capital partner, and an ex-employee of crypto fund Pantera Capital, Charles Noyes.
According to a report by CNBC, the endowment also invested in Andreessen Horowitz’s $300 million crypto fund. Though the size of the investment by Yale couldn’t be ascertained and the school hasn’t commented on the situation as of now. It is safe to assume that the $30 billion endowment Ivy league school headed by David Swensen, now joins the small but ever-increasing group of large institutions to entrust in cryptocurrencies.
Good for Crypto
Yale entering the space is a welcoming news for the digital assets as it will encourage other big or small scale investor to look keenly into the market. Swensen is deemed as a pioneer in the institutional investing majorly due to his successful management of one of the most-watched and best-performing college endowments for three decades. Many other endowments tend to follow his investment model, which would currently invite them to invest in cryptocurrencies as well.
The digital assets have been facing a bearish market after receding from their 2017 high, however, the entrant of the institutional capital firms could reverse the scenario. Although the Crypto-ecosystem embodies a lucrative market the institutions hesitate due to the lack of regulation and the risk of manipulation. On the flip side, as and when institutions join the eco-system, the subsequent regulations would not be far behind.
For past few months, despite a slowdown cryptocurrency experience multiple adoptions cases. Investment banks like Goldman Sachs, Citigroup, Morgan Stanley are exploring ways to offer crypto assets to their respective customers, Just recently, ErisX, a new exchange built for institutional traders was launched by a group of investment firms. Then there is Baktt who forays into institutionalizing the eco-system with the aid of biggies like Microsoft and StarBucks.