Emory University is the first university in the United States to disclose its stake in a cryptocurrency holding. If the University still holds the same shares as it did on Oct. 25, it possesses stakes in the Grayscale Bitcoin Mini Trust exchange-traded fund known as BTC worth over $21 million.
According to an Oct. 25 regulatory filing with the U.S. Securities and Exchange Commission (SEC), Emory holds nearly 2.7 million shares of BTC — which was worth $15.1 million at the time of filing. Due to Bitcoin share prices topping $92,437.42 and hitting all-time highs on Nov. 19, Emory’s possible holdings may have seen a 39% increase since Emory disclosed its stake.
Emory’s investments were originally in a trust, but when the shares changed to an ETF structure, the University was forced to disclose its holdings. This filing drew attention due to its Bitcoin holding, according to Emory Investment Management (EIM) Chief Investment Officer Srinivas Pulavarti.
EIM is responsible for the financial oversight of the University’s endowment, which is worth over $11 billion. According to EIM, Emory’s portfolio includes a broad range of financial asset classes and strategies to balance the market risk associated with any investment.
Associate Professor of Accounting Matthew Lyle compared holding Bitcoin directly to owning shares of a Bitcoin ETF, saying that the latter is less risky.
“There are some risks with doing it yourself, whereas if you use a company like Grayscale or BlackRock to do it for you, they basically take on the burden of the technical side of things, and it’s unlikely that they’re going to steal your money because they’re well known, and part of their gig is to manage assets and charge fees,” Lyle said.
ETFs, such as those managed by Grayscale Investments or BlackRock, are more traditional investment vehicles and generally less risky than individual stocks due to diversification. The emergence of Bitcoin ETFs, such as BTC, earlier this year has helped legitimize Bitcoin as an asset and encouraged institutional investors to buy in.
“Institutions have been somewhat reluctant to invest in digital assets, Bitcoin or [Ethereum] or various other ones, in part because the regulations … around trading in it and holding it have been quite murky,” Lyle said. “They’re still not resolved, and [institutions are] a little bit worried about getting in trouble. That is starting to change a bit with broader adoption, including the ETFs.”
Emory’s announcement coincides with surges in Bitcoin ETF investments. On Oct. 24, Bitcoin ETFs saw an influx of $188 million. Several funds, including BlackRock’s iShares Bitcoin Trust ETF and Bitwise Bitcoin Strategy Optimum Roll ETF, have reported positive inflows, indicating a shift in how institutions are approaching Bitcoin.
Oxford Financial Investment Club co-founder Stratton Young (23Ox, 25B) expressed excitement over Emory’s announcement and noted how ETF structures have facilitated cryptocurrency’s integration into the mainstream financial sector.
“It’s really hard to hold Bitcoin on your own,” Young said. “Putting it in ETF … it institutionalizes [Bitcoin] to your point where a lot of people can invest in it without having to have all the technical knowledge.”
The Grayscale Bitcoin Trust ETF launched in 2013 but was initially only available to institutional and accredited investors. This changed in 2020, it was first listed as an SEC reporting company and became the first digital currency investment vehicle to register its shares and gain this status.
Jack Yang (26Ox), who has a background in retail cryptocurrency trading and intends to double major in finance and computer science, said his first reaction to hearing the news about Emory’s portfolio was one of pride in his school for pioneering this progressive investment strategy.
Yang suspects that there will “be a lot of backlash” from Emory’s stake in cryptocurrency.
“People from older generations may not necessarily understand … they just see cryptocurrency, and they think it’s sort of a gimmick,” Yang said.
He also speculated that more traditional ETFs will start including cryptocurrency in their portfolios.
Teaching Professor of Economics Melvin Ayogu said that only time can tell if the investment will benefit Emory’s endowment but that he has faith in the University’s wealth managers.
“They consider the risk, but they also think that the benefit is worth it,” Ayogu said.
