Blockchain Bites: Universities Gain Bitcoin Exposure As Institutional Appetite For ETH Grows

Overstock seeks to quit its blockchain-related investments, Reports Tanzeel Akhtar from CoinDesk. The online shopping giant that has taken to crypto-hype will now turn its blockchain-focused subsidiary, Medici Ventures, into a managed fund.

Janet Yellen is the 78th US Secretary of the Treasury. Approved by the Senate on Monday, the former Federal Reserve chairman will oversee an office with a host of crypto-related rules on his plate. This includes an 11am Trump administration proposal to increase oversight of private wallets. The controversial, and possibly illegal, short comment period on this has just been expanded.

As BoE’s Bailey snubs crypto as crypto, it’s important to note everything the ways he’s already wrong. Crypto works for payments, although it might not be the first choice for plush “first world” economies. But it is very powerful for those who are cut off from the financial system.

It’s all about allocation…

Yesterday it was reported that universities, including several in the Ivy League, quietly bought bitcoin directly on Coinbase for their endowments.

Harvard, Yale, Brown and the University of Michigan are among those who buy, an anonymous source told CoinDesk’s Ian Allison. No university has confirmed the rumor, several declined to comment. It is currently unknown how well endowed these BTC university funds could be.

Harvard and Yale have $ 70 billion in assets between them, and the total endowment pot is estimated at $ 600 billion in 2017.

“If I had heard this three years ago, I would have said it was wrong,” said Ari Paul, co-founder of BlockTower Capital and previously chief investment officer at the University of Chicago. “But many institutions are now comfortable with bitcoin. They understand this and can just buy it directly, as long as it is from a regulated entity like Coinbase, Fidelity or Anchorage. “

Cathie Wood, CEO of ARK Investment Management echoed that thought, saying she believed more companies would load their balance sheets with Bitcoin. She told Yahoo Finance on Saturday that several executives of publicly traded companies had raised the subject with her: Should we follow Square?

Square, the fintech darling led by Twitter CEO Jack Dorsey, bought around 4,709 bitcoins in October. That initial investment of $ 50 million is now worth around $ 150 million. MicroStrategy is perhaps the most visible public company that treats its cash reserves like sewage and Bitcoin like its baby (it will never throw its BTC with the bath). It now contains a total of 70,784 bitcoins.

Rothschild Investment Corporation has also increased its exposure to bitcoin, buying 24% more shares of Grayscale Bitcoin Trust, revealed yesterday. The $ 1.4 billion investment manager does not directly own bitcoin and has long experimented with holding and deleting bitcoin. (CoinDesk and Grayscale are both owned by Digital Currency Group.)

Oddly, CoinDesk’s Danny Nelson reports that a Canadian VR company bought BTC as a “long-term” investment, but sold last week apparently over false rumors of bitcoin’s “double-spending”.

Institutional exposure is not limited to bitcoin, increasingly inherited financial firms are interested in ether (ETH), the native currency of Ethereum.

In its 2020 annual report, Coinbase noted that an “increasing number” of its institutional clients have taken positions in the ether. “The arguments in favor of owning ethereum [ether] that we hear most often from our customers is a combination, on the one hand, of its scalable potential as a store of value and, on the other hand, of its status as a digital commodity which is necessary to fuel transactions on its network, ”according to the report.

Denis Vinokourov, head of research at leading digital asset broker Bequant, told CoinDesk markets reporter Muyao Shen that some of these ETH purchases could be an indirect way to gain exposure to decentralized finance.

“Not everyone is comfortable with the risks that are always associated with DeFi, but the hyper growth of these projects stimulates activity on the Ethereum network and, therefore, supports capital appreciation.” , did he declare.

Indeed, according to DeFiPulse, the total value locked in all DeFi protocols and applications reached a new high watermark of $ 26 billion on Sunday, mainly due to the appreciation in the price of ether.

Bitcoin lost a few thousand dollars, dropping around 7% day by day, bringing with it the largest crypto market. CoinDesk’s Omkar Godbole reports that some $ 4 billion in BTC options are expected to expire on Friday. Deribit, the largest crypto options exchange, is expected to set a new record of 102,162 contracts, worth around $ 3.5 billion, closed.