The Massachusetts Institute of Technology, Cambridge, Mass., is the latest among a few university endowments increasing their exposure to cryptocurrencies.
Bitwise Asset Management listed MIT Investment Management Co. — which manages the university’s $24.6 billion endowment — as one of the investors in its latest equity raise, according to a Feb. 25 news release.
The investment round closed with $70 million raised. Details on how much capital investors including MIT provided were not disclosed. A spokesperson for MIT could not be immediately reached for more information.
Bitwise, which manages over $12 billion in assets, issues a variety of products, including bitcoin exchange-traded funds. In January, the Securities and Exchange Commission gave the crypto specialist initial approval for a combined spot bitcoin and ether ETF.
Some of the investors participating in the fundraising round include Massachusetts Mutual Life Insurance Co., Highland Capital Management, as well as venture capital firms such as General Catalyst Partners, Khosla Ventures and Electric Capital — which led the fundraise.
Bitwise noted in the news release that it plans to use the equity raise’s proceeds to bolster the firm’s balance sheet and expand its team. The firm currently has more than 100 employees across three offices in San Francisco, New York and London, but intends to grow to more than 130 employees this year.
At the start of 2024, the crypto specialist’s assets under management were $1 billion, according to a spokesperson for Bitwise. Since then, the AUM has grown by more than 10 times to over $12 billion, the release noted. In an October news release, the firm had just surpassed $5 billion in AUM.
“Following the path charted by private equity, private credit and high-yield bonds, crypto is coming into its own as an increasingly institutional and unique alternative asset class,” Bitwise CEO Hunter Horsley said in the Feb. 25 news release. “We’re proud to have been a reliable partner to clients for the last seven years, and we are building the firm to be the best partner to clients for decades to come.”
MIT is among the few universities that have made or expressed interest in crypto-related investments in recent years, though most have been through venture capital firms with exposure to cryptocurrencies.
In a Feb. 26 statement to Pensions & Investments, Horsley noted that interest among endowments and foundations “slowed in 2022 amid the market pull back in both crypto and more broadly,” but interest is now returning and growing this year.
The $80.1 billion University of Texas/Texas A&M Investment Management Co., Austin, had a crypto commission conduct research into the total market capitalization of digital assets as well as attraction to the space from venture capital firms, according to meeting minutes from the 2022 fiscal year, when Britt Harris was still CEO. He told the Financial Times that the endowment made a small investment in cryptocurrency venture funds during the early 2020s.
In 2018, Yale University was among the institutions that helped raise $400 million for a digital assets-focused fund started by Coinbase co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang and Charles Noyes, a former employer of the crypto-focused firm Pantera Capital. The New Haven, Conn.-based Ivy League institution had $41.4 billion in assets as of June 30.
During the quarter ended Sept. 30, 2024, Atlanta-based Emory University held 2.7 million shares of the Grayscale Bitcoin Mini Trust ETF, valued at about $15.1 million, according to a 13F holdings report filed Oct. 25.
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, told P&I in November that the $8.1 billion endowment’s investment marked the first time he has seen a university invest in a spot bitcoin ETF.
The University of Austin — which welcomed its first class of students this academic year — announced a “forward-thinking” plan to raise a $5 million bitcoin fund in partnership with custodian Unchained Capital, according to a May news release. Established in 2021, the private university’s $200 million endowment will remain invested in bitcoin for at least five years. Among the university’s founders include journalist Bari Weiss and Joe Lonsdale, CEO of venture capitalist 8VC and co-founder of software firm Palantir Technologies.
