Summary: Felix, PANews

In recent years, with the rise of the cryptocurrency craze, some investors have seen the potential to add to their digital portfolios. Donor funds and foundations, which were previously on the sidelines, have begun to adopt a more open attitude towards investments, becoming some of the first institutional investors to accept cryptocurrencies.

Pantera Capital, a venture capital fund focused on digital assets based in California, reported that the number of its donor fund and foundation clients has increased eightfold since 2018.

Donor funds are designed to provide funding for non-profit organizations such as hospitals, churches, or universities. University endowments are pools of funds accumulated by academic institutions, typically existing in the form of charitable donations. These funds are used to support teaching and research and can be allocated to various assets for investment purposes.

Recently, the University of Austin, which was established a year ago, is raising $5 million in Bitcoin for its $200 million endowment fund. This is the first such fund among donor funds and foundations in the United States.

The University of Austin aims to develop a five-year Bitcoin holding strategy. Chad Thevenot, the university's vice president, stated, "We believe Bitcoin has long-term value, just as we believe stocks or real estate have long-term value."

In October of last year, Emory University in Georgia became the first university endowment to disclose its Bitcoin ETF holdings. According to a filing submitted to the U.S. SEC, the university holds nearly 2.7 million shares of the Grayscale Bitcoin Trust, valued at over $15 million, and also holds 4,312 shares of Coinbase stock.

In 2018, Yale University's endowment invested in two cryptocurrency venture capital funds when Bitcoin was worth less than one-tenth of its current price. One was managed by Andreessen Horowitz (a16z), and the other was Paradigm, founded by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang.

Additionally, sources indicate that some of the largest university endowments in the U.S. have been quietly purchasing cryptocurrencies through accounts on Coinbase and other exchanges, including Harvard University, Yale University, Brown University, the University of Michigan, and several others.

Britt Harris, former chief investment officer of the University of Texas/Texas A&M Investment Management Company (with assets of $78 billion), stated that under his leadership, the largest university endowments in the U.S. made "a small experimental" investment in cryptocurrency venture capital funds in the early 2020s, viewing it as a "potentially attractive future strategy."

Moreover, Lai from the Rockefeller Foundation indicated that they would consider increasing investments in cryptocurrencies if the user base "expands and deepens."

In addition to university endowments, cryptocurrencies are also becoming increasingly popular in pension funds, indicating a shift in the mindset of the younger generation.

Pension funds in places like Wisconsin have previously reported holding Bitcoin ETFs. Additionally, the Jersey City municipal pension plan in New Jersey announced it would allocate 2% of its assets to ETFs.

According to a Bitget Research report, up to 20% of Generation Z and Generation Alpha are willing to receive their pensions in cryptocurrency. 78% of respondents indicated that they trust "alternative retirement savings options" more than traditional pension funds, highlighting a significant shift towards "decentralized finance and blockchain-based solutions."

It is worth mentioning that "herd" investing has raised concerns among some individuals.

Cornell University professor Eswar Prasad stated, "I am very concerned about institutional investors entering essentially purely speculative financial assets, which do not provide much hedging compared to other risk assets." "Bitcoin seems to rise and fall with the prices of other risk assets like stocks, but its volatility is much greater."

Brian Neale from the University of Nebraska Foundation believes that due to the low adoption rate of cryptocurrencies among allocators, he does not consider cryptocurrencies to be an "institutionally investable" asset class. He currently does not plan to enter the field until more peers join and regulations become clearer. He also called for increased regulatory transparency, such as guidance from the U.S. SEC on cryptocurrency investments, to regulate the industry.

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