John Lore, the founder of Capital Fund Law Group, has claimed that academic institutions and universities have began to get involved in the cryptocurrency market, finally taking a long hard look at the long-term potential of cryptocurrencies like bitcoin and ethereum.
“We’re seeing some academic institutions getting involved on a limited basis for strategic reasons. I can’t say the names of [the academic institutions] because that’s attorney-client but we have people mostly on the East Coast that have begun doing investments in this space on a fairly modest basis,” said Lore in a report on Business Insider.
An institutional investor is a body that pools funds from various sources to purchase properties, securities, and assets. Institutional investors include organizations or groups such as banks, insurance companies, hedge funds, endowments, and mutual funds.
Entities like universities and endowments are proper institutional investors that can apportion many billions of dollars into the cryptocurrency market and raise the liquidity of cryptocurrencies.
However, for academic institutions and endowments to pledge large sums of capital into the cryptocurrency market, proper custodian answers are of the essence, as cryptocurrency hedge fund Blocktower founder Ari Paul had stated earlier:
“Institutional money started trickling into cryptocurrency in mid 2017, but it’s been slower than many (including myself) expected. That doesn’t mean it’s not coming. There are a lot of pieces that need to come together, one big piece being third party custody. Custody isn’t binary. It’s not like Coinbase custody will launch and suddenly every pension will throw $100m into BTC. It takes time for custody solutions to gain trustworthiness. But, I think we’ll have solid third party custody by September of this year.”
Lore reiterated an identical sentiment and stressed that the majority of investment that has come into the cryptocurrency market comes from from high net-worth individuals and family offices, and not institutional investors. But, Lore stressed that there are a number of institutional investors that are actively involved in the cryptocurrency market, and once potential regulatory conflicts are clarified, institutions would start to invest in the market.
Lore said that university endowment funds have already began to invest in the cryptocurrency market on a restricted basis, adding that the rising interest toward the market by endowments indicate the strong potential of cryptocurrencies in the long-term.
“We see academia as a tie between these somewhat young and enthusiastic fund managers and capital raising,” Lore remarked.
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