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David Swensen Enters Crypto Market on Two Silicon Valley Funds

October 5, 2018 Off Steven Anderson By Steven Anderson

David Swensen, following the success of the 29.4 Billion University’s Endowment at the Yale University Investments Office is entering the cryptocurrency space.  He is making his big bets in two cryptocurrency based venture funds.  This he does after the extreme volatility of Bitcoin and other digital currencies.

Swensen’s team has invested in Andreessen Horowitz’s.  The crypto fund is valued at $300 million.  The next crypto venture is Paradigm, which is a blockchain based cryptocurrency fund that was started by Fred Ehrsam, the Cofounder of Coinbase.

Marc Andreessen and Ben Horowitz founded Andreessen Horowitz’s.  Andreessen Horowitz’s, headquartered in Menlo Park, California is a private American Venture Capital firm.  The Andreessen Horowitz software provides for seed and venture growth.

The company has been successfully connecting entrepreneurs, industry experts, academicians, executives, investors, and several others in the technological ecosystem. They have been successfully building a network of top experts with top marketing resources, top media, executive and technical talent.  Key opinion leaders, influencers, decision makers making Fortune 500 and Global 2000 companies are a part of the portfolio.

Fred Ehrsam, the co-founder of Coinbase, is focusing on the Paradigm which is a $400 million fund. Offices of Fred Ehrsam, Andreessen Horowitz, and Swensen’s team declined to comment any further about the actual amount invested.  They stated that the information is supposed to be confidential.

Cryptocurrency as an asset class has suffered a great deal in the current year following the historic rally in the past year.  The asset class is yet to win the support of institutional endowments and foundation.  The participation of Yale University represents the much-needed vote for the cryptocurrency as an asset class.

Swensen’s investment is a sign of endorsement of crypto assets.  It is highly significant as he is one of the most followed experts in institutional investing.  He has been managing the most watched college endowment for more than three decades.  He has maintained it so well that several endowments have chosen to replicate his investment model.  His investment model mainly focuses on long-term investments where the capital will be committed to illiquid assets inclusive of private equity.

While top names in investments have been skeptical about crypto with Jamie Dimon calling the crypto as a “fraud.”   And other giants were calling it to rat poison, tulip mania, and more.

The current challenge for venture capitalists in crypto projects is very different from what they will face in start-ups that follow a traditional return model.

Bill Barhydt, Abra stated that “People are excited about it but afraid of being the first, or having to explain themselves,” he further added “That’s the fear vs. greed of institutional investing. There’s a herd mentality there as much as there is in retail investing.”