Colleges and universities have been scrambling to meet the demand for blockchain- and cryptography-focused courses. But they may also have started investing real money into digital currencies and the underlying technology. 

Endowments are the lifeblood of many higher education institutions, and one of the biggest is Yale University, now reportedly investing part of its $29 billion endowment into two blockchain-focused funds. Other university endowments doing the same will have significant implications for institutional exposure to the blockchain world.

Investments by endowments are one of “the important building blocks to leading more institutional capital in the space,” Blockchain Capital partner Spencer Brogart told CNBC on Friday.

Money Matters

According to Bloomberg, quoting an industry survey from 2016, about 800 U.S. universities combined for more than a half-trillion dollars in endowment assets. Second in size behind Harvard, Yale’s endowment is led by Chief Investment Officer David Swensen, who has been called the university’s Warren Buffett for his consistent investment returns and focus on non-traditional options (although Buffett himself remains famously skeptical about cryptocurrencies).

Yale’s endowment racked up a 12.3 percent return on investment for the year ending June 30. While few higher educational institutions have endowments of this size, many use them to help cover operating costs; for Yale, this year’s annual spending of the endowment represented more than one-third of all revenue.

Yale’s endowment has reportedly made investments into two blockchain-focused funds in recent months: the $300 million a16z crypto fund run by Andreessen Horowitz, and Paradigm, which was cofounded by former leadersof Coinbase, Sequoia and Pantera and has raised $400 million. Neither Yale nor the funds have confirmed the investment.

Jumping Into the Digital

While both funds focus on early-stage blockchain companies, Brogart predicted the next step will be for endowments to “go direct in the markets” by investing directly in cryptocurrencies. For now, their managers might be “not quite ready to deal with the service providers and custodians,” Brogart told CNBC. However, that could change with the imminent emergence of institutional-focused players such as BAKKT.

And while university endowments may begin investing in blockchain in greater numbers, blockchain companies are already investing in universities to help the schools educate the students who may become employees after graduation.

Virginia Tech may become the world’s first university to offer a minor in the technology, following a $3 million donation by Block.one earlier this year. The donation, which has allowed the university to add computer science courses on the technology starting this fall, could ultimately culminate in a full minor in two years, university officials said.

Like Block.one, other blockchain-focused companies are providing support to institutions seeking to expand course offerings and research on the technology. Ripple’s $50 million grant program, announced this summer, is working to help 17 universities worldwide expand interdisciplinary programs and research in blockchain technology.

Despite what turned out to be an erroneous report of a blockchain major to be offered at New York University, demand for blockchain courses is, in fact, growing. NYU’s original blockchain class turned out to be so popular it had to be moved to the business school’s largest lecture hall. An August survey by Coinbase and Qriously found 42 percent of the top 50 universities globally offer at least one course in blockchain, and some colleges are beginning to offer blockchain certifications, bootcamp courses and other career-focused offerings.

Mark Toner
Mark Toner is a Washington, D.C., writer and editor. He has covered business, technology, media, education, and healthcare for a wide range of trade and industry publications.