Endowments eye crypto allocations amid tougher return outlook for traditional investments

CoinDesk

by Helene Braun

February 25, 2026

AI-Generated Deep Dive Summary

Endowments are increasingly turning to cryptocurrency allocations as they face lower expected returns from traditional investments like stocks and bonds. With equity valuations remaining high, credit spreads near historic lows, and private markets becoming crowded, many institutions are seeking new strategies to achieve their return targets. This shift was highlighted at the iConnections conference, where chief investment officers expressed concerns that past investment approaches may no longer yield the same results in a changing financial landscape. The pressure on endowments to generate higher returns is compounded by obligations such as annual payouts of 5% of assets and operating costs. These factors create a challenging mathematical equation, pushing investment teams to explore riskier strategies. While cryptocurrencies have long been viewed as too volatile or operationally complex for traditional institutions, the recent approval of spot Bitcoin and Ethereum ETFs in the U.S. has made them more accessible. Institutions like Harvard University and Brown University have already begun allocating small portions of their portfolios to cryptocurrency ETFs, signaling a broader shift toward digital assets. These moves reflect a growing recognition of cryptocurrencies as a potential diversification tool for institutional investors. However, panelists at the conference emphasized that the broader challenge extends beyond any single asset class, with macroeconomic uncertainties and thin equity risk premiums creating a tough environment for achieving outsized returns. Despite the risks associated with crypto—such as volatility and operational complexity—the inclusion of these assets in mainstream investment strategies underscores their growing acceptance in institutional finance. This trend is particularly significant for readers interested in cryptocurrency, as it highlights the potential for increased adoption by traditional financial institutions, which could further legitimize and stabilize the market.

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Originally published on CoinDesk on 2/25/2026