Join thousands of others who receive this daily analysis of crypto markets & news in their inbox every morning - subscribe now.
The secret is out — Yale has jumped into crypto.
Yale is home of the second largest university endowment in the country and generally regarded as one of the best. They recently invested in Paradigm, a new $400 million cryptocurrency fund led by Matt Huang (former Sequoia) and Fred Ehrsam (co-founder Coinbase). Previously, Yale secretly invested in Andreessen Horowitz’s crypto fund as well.
The $30 billion endowment is slated to have 60% of their assets allocated to alternative investments in 2019, which now includes cryptocurrencies. This move should be an important inflection point for the industry.
Yale is closely watched, and many times mirrored, by other endowments, foundations and pensions. The university endowment’s participation in crypto will lend credibility, while providing the catalyst needed to get more institutions in the game. There is an element of “If it is good enough for Yale, then it is good enough for us.”
For those that don’t know, institutional investors are a very different animal than high-net worth individuals or family offices. The large organizations tend to write more meaningful checks, conduct deeper levels of diligence, and require more robust governance rights and terms. As each new institution participates, the industry will mature at an accelerating rate.
Here are a few more milestones that will come in the future and have meaningful impact:
There are large consultants that advise major institutional investors. As these consultants begin to “approve” crypto funds for investment, there should be an influx of capital into the market.
A public institution, like a public pension, will invest in cryptocurrency or crypto fund. All of the institutional investors to date have been private organizations. The first public institution will unlock a whole new bucket of capital.
A sovereign wealth fund announces they have bought a significant amount of Bitcoin. Given the fixed supply of the digital asset, this announcement would likely drive other nation states to seriously look at Bitcoin and begin buying out of fear of missing out.
Crypto is starting to hit the mainstream investment world. As this trend accelerates, it wouldn’t surprise me if we saw $10+ billion enter the market over the next 6 months. These are serious dollars that are managed by some of the most sophisticated investors in the world.
Get your popcorn ready. The crypto show is just beginning.
The “Off The Chain” podcast has been downloaded 80,000+ times in 120 countries. You can listen to the latest episode with Michael Sonnenshein, Managing Director of Grayscale Investments now: Click here for Off The Chain podcast
Fidelity bets on the future with blockchain Fidelity is spending billions of dollars to compete in new technologies like blockchain, artificial intelligence and virtual reality. According to executives, Fidelity wants to measure itself against tech firms like Nvidia, not it’s more traditional Wall Street rivals like Charles Schwab. Fidelity’s blockchain club for employees called "bits and blocks," hosts seminars, office hours and meet ups, now has roughly 2,600 members. Read more.
Russian government hackers mined bitcoin to fund attacks: A lengthy indictment from the Justice Department dropped today, accusing seven Russian intelligence officers of conspiring to hack anti-doping agencies around the world in retaliation for their efforts to expose Russian athletic doping. And, at least according to the US officials, the GRU hacking group mined bitcoin to fund its efforts. Read more.
BlackBerry unveils blockchain partnership to support medical research: BlackBerry, the software company and former maker of an eponymous line of mobile phones, announced plans for a new blockchain platform aimed at storing and sharing medical data. The firm would use its "carrier-grade network operation center" to support the digital ledger. It would specifically be used to securely store data from patients, labs and monitors. Read more.
Abra is launching a crypto token tied to an investment fund: Crypto wallet provider Abra is launching a new token in a bid to offer investors more exposure to the cryptocurrency market. The Bitwise 10 Crypto Index Token, developed with Bitwise Asset Management, tracks the top 10 cryptocurrencies by market capitalization and is rebalanced monthly. Investors can purchase the token, which is built on bitcoin, to essentially invest in all 10 cryptocurrencies at once. Read more.
Overstock's Medici Ventures invests in wine-tracking blockchain startup: Medici Ventures, the blockchain accelerator and subsidiary of Overstock.com, has made a seven-figure investment in blockchain startup VinX. Israel-based VinX is developing a supply chain platform for trading wine futures, which allow connoisseurs and collectors to purchase a vintage while it's still in the barrel, a year or two before it's bottled and released on the market. Read more.
EU markets regulator budgets €1.1 million to monitor cryptos, fintech: The EU's financial markets watchdog has revealed that it is setting aside over €1 million in order to monitor cryptocurrencies and other fintech activities during 2019. The agency explains that it takes a "particular focus" on financial innovation including crypto assets, adding that it actively looks for issues and risks connected to such activities. Read more.
If you enjoy reading “Off The Chain,” click here to tweet to tell others about it.
Nothing in this email is intended to serve as financial advice. Do your own research.