A recent survey by Globe Custodian and the TRADE Crypto, in collaboration with blockchain security company BitGo, shows that institutional investment is growing, a trend in keeping with what firms like PwC and Morgan Stanley have said.
The particular investment vehicle that has been seeing great growth is endowment funds. The survey looked at 150 endowment funds conducted in Q4 2018, and 94% of them had invested in crypto initiatives over the last year. Most respondents were from America, and the rest from the UK and Canada.
Despite some respondents saying that security, liquidity, capital flow, and regulation were key to assets being considered for endowment funds, nearly 50% of respondents said that they expect crypto investments by endowments to increase over the next 12 months.
Endowment funds are a specialized form of investment where the party can periodically withdraw funds from the initial capital.
Jonathan Watkins, managing editor of Global Custodian and the TRADE, said of the development,
It’s fascinating to see that despite the widely-publicized 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. 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 general response from investors was one of “cautious optimism.” A full version of the report can be viewed here.
2019 the Year for Institutional Investment?
Several reports have been released in recent times that show the growth of institutional investment, which many consider an important step for the growth of the market. The arrival of Bakkt and Fidelity Investments has many crypto enthusiasts excited about the prospects of a large influx of funds. Grayscale and Gemini have both also been working on institutional sales.