If Crypto is Dead, why is Yale’s Endowment Fund Investing in It?

cryptocurrency

Even as more apprehensions are cast on the viability of cryptocurrency in an increasingly volatile financial market, there are a few hedge fund investor groups that still stick to the digital currency as their preferred mode of investment. One of these groups is the well-known Yale’s Endowment Fund, a recent entrant in the world of cryptocurrency investment.However, the decision to invest in the crypto hedge funds unsurprising once the reasons behind the decision are delved into.

Yale has plans to raise a total sum of US$400 million through early-stage blockchain start-ups in the incubation stage, cryptocurrency exchanges and blockchain technology as a whole. A major part of the initial capital is supposed to come from its own assets pumped into its endowment funds, to the tune of US$30 billion. This investment is a part of a long-term strategy on Yale’s part to increasingly invest in alternative strategies.

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The news of this investment is another item in a long list of positive news that has increased the scope of cryptocurrency in the financial world. While the digital currency is still deep down in doldrums since the arrival of 2018 and increased scepticism about the Bitcoin, latest evaluations have been positive. The overall value of digital money has been stable for the majority of the year which has come across as a relief for active and potential cryptocurrency investors alike. The trend looks to continue into the early part of 2019, which has enabled institutional investors like Yale to continue their investments since such investors generally invest in long-term plans and are strongly averse to any volatility in the market.

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The development of increasing valuations for crypto currencies has been cited as one of the best things to happen for the crypto-financial world by financial experts, who are also hopeful of the continuing trend.However, the unaffected nature of this news on coins and their prices in short-term is the concurrent view of all the experts on the subject. In the matters of Bitcoins and their prices, the situation is still the same as last year with the trends expected to spill into early 2019. The Bitcoin is expected to show the same results even as bad reputation continues to stockpile in the form of critical reviews from regulators and experts and in the form of numerous scandals that have exposed the volatility of the cryptocurrency in recent times.

Another added advantage of the investment is the perception of the cryptocurrency market as one of the non-correlated assets. This enables the investing agencies, particularly the institutional investors, to keep investing in such markets without having to worry about the overall growth in their whole capital. This is because non-correlated assets have their own investment market that is mutually independent of the mainstream market. The flexibility offered by such assets and lower growth volatility without any sacrifice on the part of capital growth is a quality sought after by many long-term investors.

In this way, even though cryptocurrency is supposed to be dead, the decision of Yale to invest in it seems logically sound and visionary in its growth. So long as there are no unexpected hiccups, Yale’ Endowment Fund is poised to do just fine.

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    Jurgen

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