University of Michigan Endowment Increases Its Crypto Investments, Follows Harvard and Yale

One of the most feasible ways for cryptocurrency adoption to increase is for large funds, such as pensions and endowments, to begin investing. Some of the most notable examples are university endowments, which are large pools of assets owned and managed by the university in perpetuity. 

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The University of Michigan is one of the endowments investing in cryptocurrency, albeit not directly into specific tokens. The university invested in a crypto fund from Andreessen Horowitz called the CNK Fund I, L.P. The fund is designed to "invest in cryptonetwork technology companies across the spectrum of seed, venture, and growth stage opportunities”. In June 2018, the endowment made an initial investment of $3 million into the fund. The University of Michigan’s endowment was worth $17.9 billion in June 2023. 

In a subsequent communication with the university’s Regents, the fund made "follow-on investments with the previously approved partnerships listed below," including the Andreessen Horowitz fund. While the amount of the follow-on investment is unclear, it was likely to be millions of dollars. 

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The endowment explains its investment decision by stating that "crypto has become an important area of innovation and entrepreneurship that warrants focused attention" and that "as opportunities related to cryptonetworks transition from being undefined to becoming more visible and sharply defined, the need for a separate thematic fund may recede." 

The University of Michigan is one of many endowments to invest in crypto. In 2018, it was revealed that Yale, the second largest endowment of $40.7 billion as of June 2023, helped contribute to the $400 million capital raise for a crypto fund from Coinbase and Pantera Capital. 

The Harvard endowment has also invested in crypto funds, noting in 2018 that it has invested in "at least one cryptocurrency fund." This was especially notable as Harvard holds the largest endowment, over $50.7 billion as of June 2023. 

Other universities investing in crypto or crypto funds include Stanford University, Massachusetts Institute of Technology, Dartmouth College, and the University of North Carolina.

While it has been some time since most endowments made their initial investments in 2018, there have been some follow-on investments and additional capital commitments in the years since. Additionally, as crypto continues to grow and become more accessible through spot ETFs, there is a strong possibility that endowments and other large funds will continue investing in crypto. 

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