Academic Institutions Are Investing in Bitcoin
The superior institutions started to invest in cryptocurrencies, stated John Lore, the founder of Capital Fund Law Group.
“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,” Lore told Business Insider.
The definition for an institutional investor
If we were to consider the explanatory definition, an institutional investor is a private or public property that collects funds from external sources to acquire assets. Examples of such investors are banks, insurance companies, mutual funds and others.
Taking this into account, small hedge funds and investment companies don’t fit into the concerns of an institutional investor, the aspect which is denied by many of the crypto investors. Instead, there are universities that are considered as institutional investors, which are able to allocate enormous amounts of money to participate in the race of cryptocurrencies.
The Universities must follow the rules
For an academic institution to invest in the purchase of virtual coins such as Bitcoin and Ethereum, they are required to take account of a set of rules, as Blocktower founder Ari Paul explained:
“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 agreed with Paul, noting that much of the investments were made by individuals and not by institutional investors. He added that once the regulatory barriers are destroyed, the institutions will benefit from new opportunities.
The interest of academic institutions for the crypto market is growing. Lore has confirmed the existence of several institutions from the academic sector that have begun the process of adapting to the crypto sector within the possible limits. “We see academia as a tie between these somewhat young and enthusiastic fund managers and capital raising”, he added.
The increasing demand from academic institutions for the crypto sector indicates that these consider cryptocurrencies as useful assets that can compete at the same level as fiat currency.