94% of Surveyed Endowment Funds are Making Crypto Investments

Last year, crypto related investments were made by 94% of endowment funds, according to a latest survey. The poll was carried out in 4Q18 by business publications Global Custodian and The Trade Crypto, in collaboration with blockchain security firm BitGo.

89% of the 150 endowments polled were US based, with the balance being in Canada or the UK. The poll indicated that investments in crypto assets will be carried out by endowments despite issues such as custody, regulation and liquidity. Only 7% participants anticipate a decline in their crypto related investments by next year.

Jonathan Watkins, managing editor at Global Custodian and The Trade, has the following to say about the survey results:

“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 poll has revealed that 54% of the participants are investing in cryptocurrencies directly, while 46% are investing through a range of funds.

Over the next 12 months, 50% revealed they expect to increase their crypto investments, with 45% anticipating their allocations will remain at their current levels.

In the forthcoming year, 50% of respondents anticipate to boost their crypto investments, while 45% do not expect any change to the current level of allocation.

The survey also revealed that the top three features sought by endowment funds while selecting a crypto fund is regulatory compliance, adequate capital backup along with liquidity, and account safety.

In general, endowment funds are cautiously optimistic with regard to the budding asset class, quoting one survey participant’s opinion that cryptocurrencies “is the future of investing.” Notably, some other participants portray investment in cryptocurrencies to be “a very wild ride” and “hair-raising.”

It can be remembered that the University of Michigan’s $12 billion endowment disclosed plans to increase its investment in a crypto fund administered by US venture capital firm Andreessen Horowitz.

Likewise, Yale and Harvard invested in cryptocurrency funds, with the latter making ~$39.20 billion endowments for the fiscal 2018 was the biggest of any university endowment worldwide.

Furthermore, Harvard’s endowment is anticipated to turn into a direct investor though a planned $50 million token sale from Blockstack, a decentralized computing network. If the proposal gets through, the token sale would be the first ever offering authorized by Securities and Exchanges Commission.