U.S. universities and nonprofit foundations are increasing their investments in cryptocurrencies, driven by the rapid price gains of digital assets and political signals from Washington. While Bitcoin and others have significantly outperformed other asset classes in the past five years, institutional investors are now also jumping on board out of fear of missing a historic opportunity.

The University of Austin is establishing the first Bitcoin fund for university endowments with a volume of five million dollars. Emory University in Georgia is already one step ahead: in October, its endowment became the first US college to disclose Bitcoin ETFs in its portfolio. The Rockefeller Foundation, which is already invested in crypto venture funds, is also considering increasing its involvement—provided the user base grows.

We don't have a crystal ball to see how cryptocurrencies will develop in ten years," says Chun Lai, Chief Investment Officer of the Rockefeller Foundation. "But we don't want to be left behind if their potential suddenly materializes.

Institutional investors are pushing into the crypto market

Pantera Capital, a leading crypto venture firm from California, has seen an eightfold increase in university and endowment investors since 2018. Yale University was also one of the first institutional investors in the crypto sector in 2018 - at a time when Bitcoin cost less than a tenth of today's price.

Britt Harris, former CIO of the $78 billion University of Texas/Texas A&M Investment Management Funds, confirms that the university made its first test investments in crypto venture funds in the 2020s. "You have to learn to walk before you can sprint," Harris said about the cautious strategy.

Despite growing interest, there are also critical voices. "I have significant concerns about institutional investors entering a highly speculative asset class," warns Eswar Prasad, economics professor at Cornell University. "Bitcoin behaves similarly to stocks - only much more volatile.

Bitcoin as the Best Performing Asset Class – but Risks Remain

An index calculated by Bitwise Asset Management, which tracks the ten most valuable cryptocurrencies, has increased by an average of 64 percent per year over the last five years. In comparison, US stocks achieved only 14.5 percent annual growth in the same period.

Franklin Bi, Partner at Pantera Capital, speaks of a "huge change": Foundations and universities that showed little interest five years ago are now active investors in the crypto sector.

At the same time, skepticism remains high.

Regulation and Trump's Influence on the Crypto Sector

Uncertainty about the political future of the crypto sector remains an obstacle. While Trump wants to build a "Bitcoin superpower" and advocates for the introduction of state cryptocurrencies, Neale calls for clear regulation by the Securities and Exchange Commission (SEC) to stabilize the market in the long term.

“This government has the power to steer things in the right direction,” says Neale. “But just because the president issues his own cryptocurrency, it will not lead to a crypto breakthrough.”