Digital assets are slowly gaining the attention of major mainstream investors as 94 percent of endowment funds have some form of cryptocurrency investments, according to a recent study.
Published on April 11, the report was based on a survey conducted in Q4 2018 by Global Custodian and The Trade Crypto, along with blockchain security company BitGo.
The companies questioned fund managers based in three countries – the United States, the United Kingdom, and Canada – and out of 150 participants, 89 percent are based in the US.
No specific regulations
Despite constant regulatory concerns along with market volatility and lack of liquidity, 54 percent of the funds have invested directly in the digital asset market. The remaining 46 percent have taken an indirect route and invested in various funds backed by crypto.
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Commenting on the study, Jonathan Watkins, managing editor of Global Custodian and The TRADE, stated: “It’s fascinating to see that despite the widely-publicized concerns around regulation, custody, and liquidity, endowments have been factoring crypto-related investments into their allocations, and very few are showing intentions of stepping away.”
“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.”
Despite the bullish remarks of the fund managers, seven percent of the participants are anticipating a decrease in their allocation in the next 12 months, while 45 percent of them are willing to hold on to their investments.
Educational institutional betting big on crypto
Earlier this year, Finance Magnates reported that the University of Michigan was considering to increase its existing $3 million stake in the Andreessen Horowitz-managed crypto fund a16z. The investment was part of the university’s existing $12 billion endowment fund.
Ivy league universities including Harward and Yale also have reportedly allocated a portion of their endowment funds in digital assets.