New Global Custodian, The Trade Crypto And BitGo Report: Over 90% Of Endowment Funds Involved With Crypto Investment Funds
Recent Study Shows Approximately 94 Percent Of Surveyed Endowment Funds Are Allocating To Crypto-Based Investment Funds
According to a new study which was released back on April 12th, approximately 94 percent of endowments have been steadily allocating more funds into cryptocurrency related investments over the course of 2018. The study, which was only recently published, took place over the course of the final quarter of 2018 by Global Custodian as well as The Trade Crypto, which operate as international trade publications, in collaboration with the Blockchain Cybersecurity company – BitGO.
In total, the study included the surveyance of approximately 150 endowments, with the vast majority of them reportedly operating within the United States (approx 89 percent) with the remaining of these being in operation within Canada and the United Kingdom.
This is the overwhelming majority that delves into the world of crypto investments, and in spite of there being a continued and deeply rooted concerns when regarding the liquidity of these investments, along with matters of custody and regulation of specific investment funds and exchanges. The survey went on to indicate that these same endowments would go on to allocate investments into this new asset class regardless.
Out of the 150 surveyed, only around 7 percent of respondents went on to say that they expected their investment to be subject to decreases over the next fiscal year.
Operating as the managing editor for Global Custodian and The Trade, Jonathan Watkins went on to remark the following regarding the survey:
“All the talk over the past 18 months has been around when institutional investors will begin participating in cryptocurrency investments, but it turns out they had already arrived, in the form of endowment funds.”
The survey went further on to report on the investment behaviors of these same Endowment funds. Approximately 54 percent of them were directly involved in investing in a range of crypto sets, while the remaining 46 percent did so using indirect funding through crypto funds.
The level of optimism towards investments over the next 12 months appear to be relatively muted, with 50 percent of this same number expecting to see net increases to their investments over that time, with another 45 percent believing that their allocations will remain relatively stable over the same span of time.
According to the same survey, when endowments are looking into a viable crypto asset of a related fund to invest in, they look for three specific characteristics. These tend to be that these crypto funds are in compliance with a robust framework of regulation along with having a sufficient level of capital flowing in and out, along with having a sufficient level of liquidity while also offering a viable level of security for its accounts.
One of the conclusions that The Trade draws of this growing trend of endowments moving into crypto investments is that a climate of cautious optimism has entered the endowment space, with some of the respondents being resolute in their belief that investing in cryptocurrencies will be ‘the future of investing,' while others have referred to the process of investing in crypto as being “a very wild ride” and often “hair-raising.”
Reported back in February, one of the prominent examples of an endowment fund entering the world of Cryptocurrencies was the University of Michigan, which had its $12 billion endowment disclose plans to boost its investment by expanding into a crypto fund which is based on the US Venture capital company – Andreesen Horowitz.
There have also been increasing reports of crypto fund investments being made by a range of other higher education institutes such as the Ivy League educational colleges – Yale and Harvard. The latter of which involves the single largest endowment of all becoming increasingly involved with crypto funds – that being Harvards $39.2 billion endowments.
A wider range of other universities have since been steadily introducing crypto into their endowments and investments, according to the Crypto Investment team. For the moment, these include Dartmouth College, Stanford University, the University of North Carolina, as well as the Massachusetts Institute of Technology.
Going back to Harvard's endowment fund, it was reported earlier in April that the institution is getting set up as a direct investor in crypto, with an alleged $50 million token sale which is taking place with Blockstack, the decentralized computing network. If this goes on to be approved, it would become the industry's very first offering that was authorized by the United States' regulatory body – the Securities and Exchange Commission.