Old school meets new as Yale invests in cryptocurrencies

The old college try.
The old college try.
Image: AP Photo/Jessica Hill
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Yale didn’t build a $29 billion endowment and a reputation for savvy investing by being conservative.

The 317-year old university, whose endowment is second only to Harvard’s, aggressively invests in alternative assets, from real estate to hedge funds, and now is dabbling in the volatile world of cryptocurrencies.

The university has invested this year in the Paradigm fund, which focuses on cryptocurrencies, blockchain technology and coin exchanges, according to Bloomberg News and other outlets. Paradigm, which has raised a reported $400 million, was launched by Fred Ehrsam, a cofounder of the Coinbase exchange, and a group of former venture capitalists.

The Yale endowment also invested in Andreessen Horowitz’s $300 million crypto fund, sources told CNBC. The university, which has not confirmed the investments, did not respond to a request for comment.

The size of the investments is not known, but Yale’s imprimatur may lend legitimacy to the untamed world of cryptocurrencies. Institutional investors have treaded carefully around Bitcoin and its competitors, wary of huge price swings and dodgy offerings.

Now, in the depths of the so-called crypto winter, some sober-minded investors are testing the waters. Investment banks like Goldman Sachs and JPMorgan are beginning to explore ways to offer crypto assets to customers, and a group of investment firms are launching ErisX, a new exchange built for institutional traders.

Yale’s investing decision won’t erase all doubts about cryptocurrencies. But even a tentative endorsement from one of the US’s most respected institutions could help draw them out of the shadows.