Yale University’s Chief Investment Officer David Swensen, dubbed the ‘Warren Buffet’ of the school’s endowment fund, apparently has a predilection for making smart investments that earned him his moniker, and now Swensen is placing bets on two venture funds dedicated to digital currencies, per a report.
With $29.4 billion under his management, it’s safe to say that Swensen has faith in these cryptocurrency funds, giving Bitcoin and its peers a much-needed vote of confidence. Swensen’s investment team has already allocated capital towards Andreessen Horowitz’s inaugural $300 million crypto fund, but it closed early this summer.
Other forays by Swensen into the cryptocurrency space include an investment in Paradigm, a blockchain and cryptocurrency-focused fund that was started by Coinbase co-founder Fred Ehrsam in conjunction with former Sequoia Capital partner Matt Huang.
Swensen’s investing prowess is the stuff of legends, dating back to 1985 when Yale’s endowment fund was a paltry $1 billion compared to its current size. Per CNBC, “Yale’s endowment returned an annualized 7.4 percent in the past decade and 11.8 percent over 20 years, according to its annual report. The fund gained 12.3 percent from June 2017 through June 2018, the university announced this week. Harvard University, with a $39.2 billion endowment, posted a 10 percent gain.”
Bitcoin’s price currently stands at $6,593.60 as of 12:00 p.m. ET.
A Bitcoin ETF in 2019?
The price of Bitcoin reached a high of $20,000 in late December of last year, but has since lost over 60% of its value as digital currencies continue to face concerns regarding manipulation and security. Despite efforts by various firms to bring Bitcoin and other cryptocurrencies under regulatory control, Bitcoin ETFs continue to face an obstructed path to legitimacy in the investment space and despite efforts by firms, they keep encountering resistance in the form of the Securities and Exchange Commission.
In an attempt to fall under the governmental regulation of the SEC, the cryptocurrency industry has been unable to bring this into fruition, starting with the Winklevoss Capital Management founders Cameron and Tyler Winklevoss application, which was rejected twice.
Related: The Key to The First Bitcoin ETF
In a recent Bloomberg “Trillions” podcast, managing director of ETF.com; Tom Lydon, ETF Trends publisher; and Todd Rosenbluth, director of ETF and mutual fund research at CFRA discussed topics in a roundtable discussion that included cryptocurrencies. They were asked whether a cryptocurrency-related ETF would finally make it to the capital markets.
“No,” said Rosenbluth. “The SEC has concerns about it. There isn’t the data to back up that this can be handled in a way without fraud–it’s a hard thing to overcome proving that.”
“SEC is looking at it for sure; they’re trying to get their arms around it,” said Lydon. “It will happen by the end of 2019.”
“I think futures-based products is where this is going to happen,” said Nadig. “It’s really hard for the SEC to say you can invest in oil futures and natural gas futures, but you can’t invest in crypto futures, they settle the same way, they trade the same way. I think it’s just a matter of time and the time is 2019.”
For more information on the cryptocurrency market, visit the Bitcoin category.