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Jumping on the train: Harvard, MIT, & Stanford

At least five more #university #endowments have invested in #cryptocurrency funds, suggesting that the “herd” of #institutional #investors is finally beginning to place at least a small bet on the nascent #asset class.

As first #reported by The Information, a #cadre of #major #educational institutions including #Harvard University, #Stanford University, #MIT, #Dartmouth College, and the #University of #NorthCarolina have each invested in at least one #cryptocurrency fund through their respective #endowments.

Citing an unnamed #source familiar with the #investments, the #publication reported that these five #university endowments have invested tens of #millions of dollars in these funds, which in turn invest in both #physical #cryptocurrencies and equity in cryptocurrency #companies.

#Yale University, which controls the second-largest university endowment next to #Harvard, had allocated some of its $29.4 billion in #assets into two #cryptocurrency funds operated by #Andreessen #Horowitz and #Paradigm.

Even with these #investments, the six #universities that are now said to have invested in #crypto #funds still have very little exposure to this asset #class. Nevertheless, the #fact that they are engaging with the #market at all could help #legitimize the #space.

As The Information journalist Jon Victor explained:

“A move by #endowments into #funds that will directly bet on #cryptocurrencies #signals a #major shift in #investor #sentiment toward the asset class, in the same way that #institutions over the past #decade became more willing to invest in #private #tech #companies. Backing from such closely watched #institutions could help validate #cryptocurrencies, which are still considered too risky by many institutional investors.”

#Cryptocurrency #investors and #analysts such as Mike #Novogratz had long predicted that a “herd” of institutional investors would power the next bitcoin #bullmarket. Ari #Paul, a cryptocurrency #fund #manager and a former #portfolio manager at the University of #Chicago’s #endowment, said in Aprilthat he believed that a number of #institutions were interested in investing in #cryptocurrency but were waiting for major names such as #Yale to make the first #move so that they would have an “#excuse” to do so themselves.

Notably, though #institutional #investors are generally viewed as having a more sober view of #cryptoassets than retail #investors, a recent survey by #Wallstreet #strategy firm #Fundstrat found that #institutions that have already invested in #cryptocurrency are actually more #optimistic about bitcoin’s near-term prospects than retail #investors.

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