$12 Billion University of Michigan Endowment Might Deepen its Crypto Stake

Institutional investors are finally wading into crypto. Want proof? The University of Michigan's $12 billion endowment said it could increase its investment in a crypto-network technology fund managed by American venture-capital firm Andreessen Horowitz.

Financial terms weren't disclosed, but the latest cash infusion into Andreessen's CNK Fund would add to the $3 million the university invested in the fund back in June 2018. The CNK Fund invests in cryptocurrency startups.

In a statement, the University of Michigan noted that Andreessen believes cryptocurrencies are "an important area of innovation" that demands further exploration and investment.

"Crypto has become an important area of innovation and entrepreneurship that warrants focused attention."

Read the full document at the bottom of the article.

Virginia Pension Funds Invest in Bitcoin

The University of Michigan’s investment comes a week after two Virginia police pension funds invested in Morgan Creek Digital’s new $40 million cryptocurrency fund.

As CCN reported, the Virginia retirement system poured a total of $21 million into the Morgan Creek Digital fund. Eleven million dollars is from the police officer’s fund, while $10 million comes from the Virginia county employee retirement fund. They represent 0.8% and 0.3% of the funds’ total assets, respectively.

Morgan Creek will use the money to invest in blockchain companies like Coinbase and Bakkt, among others.

Novogratz: Institutional Momentum is Building

The entry of institutional investors into the cryptocurrency space is not surprising to Mike Novogratz, the CEO of crypto merchant bank Galaxy Digital.

On February 1, Novogratz said he firmly believes that institutional investors will soon enter the market, so crypto enthusiasts should not panic over the prolonged bitcoin bear market.

Novogratz admitted that the Crypto Winter is lasting longer than he had anticipated, but he's "very confident" that institutions will pour into the space.

“Don’t think we head north for at least a few more months. Always take longer for institutions to move. Very confident they will. Tons of activity under the hood. Stay the course.”

To underscore his confidence in the industry, Novogratz increased his holdings in Galaxy Digital to 79.3% after acquiring an additional 2.7% of its outstanding shares for $5.4 million. He previously held a 76.6% stake.

The former Goldman Sachs partner is now Galaxy Digital’s single largest shareholder, with 221 million shares.

Despite the relentless Crypto Winter, Mike Novogratz predicts that the bitcoin price will soar to record highs in 2019, fueled by a spike in institutional investments.

While naysayers are quick to point to the current market slump as proof that bitcoin is worthless, Novogratz noted that early setbacks always occur before a new technology gains mainstream traction. “Revolutions don’t happen overnight,” he quipped.

Crypto Market is Buoyed by the Exit of Speculators

Novogratz echoed the bullish sentiments of other bitcoin fans, such as Reddit co-founder Alexis Ohanian.

Ohanian — an early investor in Coinbase — says bitcoin investors should not be discouraged by the harsh Crypto Winter because it's actually great for the long-term health of the industry.

Reddit founder Alexis Ohanian: Bitcoin bear market is great for the crypto industry. | Source: Shutterstock

Ohanian says he's unfazed by the current downturn because it's temporary. Besides, he pointed out that some of the smartest people he knows are working to build up the cryptocurrency industry.

"Yes, [bitcoin] prices are depressed. The speculators have fled, and that’s great. Because the people who are now building on crypto are true believers.

Some of the smartest people I know in tech are...building companies that are built on blockchain. The hype is gone. The fervor is gone. But that’s a good thing for all of us who have been in this [from the beginning].”

University of Michigan Crypto Investment by CCN on Scribd

Featured Image from Shutterstock

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About the author

Samantha Chang
Samantha Chang

Samantha Chang is a New York City-based financial editor who writes about crypto and business at CCN. She is a law school grad and an alum of the University of Pennsylvania. Email her at [email protected] or follow her on Twitter at Samantha_Chang.

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