Just a few weeks ago, Mike Novogratz, the CEO of Galaxy Digital and a former institutional investor, hinted that one of the world’s largest endowment funds had made a significant capital allocation to the cryptocurrency industry. At the time, however, he was not at the liberty to reveal which endowment he was privy too.
But this has changed, with Yale, who has the second-largest endowment in higher education, reportedly stepping into the cryptosphere with two surprising investments.
Yale Is Ready To Throw Hands In The Crypto Boxing Ring
According to those familiar with the matter, as relayed by Bloomberg, Yale University, one of the most well-respected academic institutions on the planet, has invested in venture capital legend Andreessen Horowitz’s A16Z Crypto fund, along with Paradigm, a fledgling technology-focused venture that is backed by some of crypto’s best.
David Swensen, who heads Yale’s $29.4 billion endowment fund, was explained to have initiated this move, which should come as no surprise as the legend of an investor has not been afraid to diversify into promising industries in the past. In fact, it has been widely believed that Swensen’s prowess for investment through diversification has been the catalyst behind Yale’s swelling endowment, which rose by 11.8 percent on average over the majority of Swensen’s multi-decade tenure.
The aforementioned sources claimed that the team of investors and analysts under Swensen had invested in A16Z Crypto’s initial funding round, which raised a staggering $300 million in June. A16Z has since made well-read investments in the cryptosphere, backing world computer project Dfinity and recently making a $15 million investment into MakerDAO through its in-house MKR tokens.
$400 Million Paradigm — Now Backed By Yale
Although Andreessen’s involvement in the cryptosphere shouldn’t be counted out, the news that Yale invested in Paradigm was just as notable. Paradigm, for those who don’t know, is a newfangled digital asset-focused fund that was founded by Coinbase co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang, and Charles Noyes, one of Pantera Capital’s ex-employees.
Not many details are available regarding Paradigm, but considering the fact that it has been overtly backed by key industry leaders and has $400 million in free capital indicates that this venture shows promise, while further bringing legitimacy and stability to an industry that has been the subject of controversy on a few too many occasions. It is important to note that Paradigm, which has garnered backing from Sequoia Capital, will also be looking into making investments into blockchain projects and cryptocurrency platforms, not just tokens and crypto assets.
Although Yale isn’t the institutional fund that crypto advocates were waiting for, the arrival of such a prominent endowment, which is focusing on the long-term growth of its assets, indicates that at the very least, crypto and blockchain technologies show a semblance of promise and potential, even amid a bearish market.