New Survey from Global Custodian and BitGo Shows Vast Majority of Endowment Funds Testing Crypto Investments

04/12/19 08:00 AM EDT

New Survey from Global Custodian and BitGo Shows Vast Majority of Endowment Funds Testing Crypto Investments

A survey conducted by Global Custodian and BitGo has shown that endowments are investing in crypto-assets and funds, undeterred by the bear market or volatility concerns, with 94% stating they invested either directly or through a fund in 2018

PR Newswire

LONDON, April 12, 2019 /PRNewswire/ -- Endowment funds have been allocating to crypto-related investments throughout 2018 and plan to continue their activity in the next year despite lingering concerns over regulation, volatility and liquidity.

Results from a survey, conducted in Q4 2018 by Global Custodian and The TRADE Crypto in partnership with BitGo, included responses from 150 endowments, with 94% saying they had invested in crypto-related initiatives in the past 12 months.

READ THE FULL REPORT: The institutional crypto backers:  How endowments are allocating to cryptocurrency investments.

Despite raising concerns about the asset class and its lack of infrastructure, only 7% said they anticipate a decrease in their allocations.

"It's fascinating to see that despite the widely-publicised concerns around regulation, custody and liquidity, endowments have been factoring crypto-related investments into their allocations, and very few are showing intentions of stepping away," said Jonathan Watkins, managing editor, Global Custodian and The TRADE. "All the talk over the past 18 months has been around when institutional investors will begin participating in cryptocurrency investments, but it turns out they had already arrived, in the form of endowment funds."

The vast majority of those surveyed (89%) were US-based, with the remainder in the UK and Canada. Respondents were primarily decision makers within their endowment with others playing an advisory or Board role.

Over half (54%) said this was through direct investment in individual crypto-assets, while 46% gained their exposure through funds of one kind or another.

Respondents acknowledged that to be considered investible by an endowment, a crypto-asset fund needed to exhibit certain characteristics, the top three mentioned being robust regulation, sufficient capital flow and liquidity, and account security.

Similarly, a number of factors were identified as inhibiting such engagement. The most prominent among these were lack of robust market infrastructure, volatility, and regulatory concerns, followed by lack of liquidity.

Asked to sum up their experience with crypto-currency or crypto-asset investments, assessments from the endowments were cautiously optimistic. The most frequent responses cited "excitement" and "interest" around crypto-assets. "I think it is the future of investing," said another.

Downloaded the full version of the report here.

Jon Watkins
+44(0) 20 7397 3815

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SOURCE Global Custodian; BitGo