Crypto Has Two Markets, And You Need To Pay Attention To Both

When I’m checking out crypto current events, I look at three things. I check crypto prices several times a day. It’s the least important of the three. But I feel compelled to do it.

Technology developments are next on my list. At the end of the day, it’s all about blockchain technology – whether it works… whether it can scale… and whether it can offer true privacy and security. Every day brings me fresh clues for these fundamental questions.

For those of you who follow my posts, you know that I like what I’m seeing these days on that front.

But it’s the third thing – who’s investing and why – that’s becoming really interesting. I believe we’re at a critical turning point. Consider this quote from Bill Barhydt, the CEO of cryptocurrency investment app Abra…

There really is zero large-scale institutional money from the West in crypto right now.

Barhydt made this statement this spring. And his observation was on the money.

But a mere half-year later, that’s no longer the case.

All Hail Yale?

The big news last week was that Yale had invested in two (two!) crypto hedge funds.

Like all endowment funds, Yale can’t take big risks with the billions of alumni dollars it manages. But it’s also expected to generate alpha gains… not an easy tightrope to walk. Yale has done it as well as any endowment, averaging returns of around 12.6% since the mid-1980s (the fund is currently valued at $29.4 billion). A big part of its bag of tricks is identifying up-and-coming alternative asset classes before almost everybody else.

Yale just put a chunk of money into Paradigm, a crypto fund that will be investing in early-stage cryptocurrency, blockchains and exchange projects. The $400 million fund was set up by Fred Ehrsam, Coinbase co-founder; Matt Huang, a former partner at Sequoia Capital; and Charles Noyes, who previously worked at Pantera Capital.