Endowments eye crypto allocations amid tougher return outlook for traditional investments

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Endowments eye crypto allocations amid tougher return outlook for traditional investments Lower expected gains from traditional assets have prompted some funds to test bitcoin and ether exposure to diversify portfolios. By Helene Braun | Edited by Stephen Alpher Feb 25, 2026, 2:41 p.m. Make us preferred on Google Columbia University campus (Rob Kim/Getty Images) What to know : Endowments and foundations are preparing for weaker returns from traditional assets as high equity valuations, tight credit spreads and crowded private markets limit opportunities. Investment chiefs say lower expected returns threaten the sustainability of payout models, pushing institutions to move further out on the risk curve and experiment with new strategies. Some major universities, including Harvard and Brown, have begun using bitcoin and ether ETFs as small, high-volatility satellite positions, signaling that digital assets have entered the mainstream institutional toolkit. MIAMI BEACH — Endowments are rethinking where they invest as they brace for weaker returns from traditional assets. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . At the iConnections conference on Tuesday, several chief investment officers said the playbook that drove gains over the past decade may not work as well in the next one. Equity valuations remain high, credit spreads are near historic lows, and private markets are crowded, leaving little room for error. “I think in general, our expectations are that for all of the traditional asset classes that we've invested in, we sort of believe this is both return compression and probably Alpha compression,” said Kim Lew, CEO and president of Columbia Investment Management Company. Lower expected returns create a math problem. Private foundations, for example, must pay out about 5% of assets each year. Add operating costs, and the hurdle rate climbs. “If you don't earn returns of 8% the model doesn't work,” said Carlos Rangel of the W.K. Kellogg Foundation, one of the largest U.S. philanthropic foundations in the U.S. That pressure is pushing investment teams to search further afield. Lew said generating outperformance may require going “a little bit further on the risk curve” and exploring strategies they have not used before. That search has, in some cases, led endowments into cryptocurrency markets, which were once viewed as too volatile or operationally complex for traditional institutions. Early university investors such as Yale and Harvard backed crypto-focused venture funds years ago, gaining indirect exposure to digital assets through private vehicles. More recently, the approval of spot bitcoin BTC $ 66,462.03 and ether (ETH) exchange-traded funds in the U.S. has offered a simpler route. Harvard University and Brown University, for example, have disclosed positions in both bitcoin and ether ETFs in their latest 13F filings. While the allocations appear small relative to their overall portfolios, the disclosures show how digital assets have moved from the fringe of institutional finance into the mainstream toolkit. For endowments facing lower expected returns from stocks and bonds, crypto ETFs can serve as a high-risk, high-volatility satellite position. Still, panelists made clear that the broader challenge extends beyond any single asset class. Many institutions are tempering expectations after years of strong market performance. Equity risk premiums look thin, private markets hold record amounts of unsold assets and macro uncertainty remains elevated. “I think it's a really hard setup for outstanding returns,” Lew said. Endowment More For You Circle Q4 earnings beat estimates as USDC issuance grows, shares surge pre-market By Jamie Crawley | Edited by Sheldon Reback 2 hours ago The issuer of the USDC stablecoin posted EPS of 43 cents for the fourth quarter, beating the consensus estimate of 16 cents. What to know : Circle (CRCL) shares jumped over 19% in pre-market trading after the stablecoin issuer's fourth-quarter earnings per share (EPS) beat analysts' estimates. The issuer of the USDC stablecoin posted EPS of 43 cents for the fourth quarter, beating the consensus estimate of 16 cents. USDC issuance rose 72% over the course of the year. Read full story Latest Crypto News CoinDesk 20 performance update: Polkadot (DOT) surges 17.2% as all assets rise 27 minutes ago The chief of the SEC is headlining an event sponsored by a crypto firm at war with it 42 minutes ago These bitcoin-linked stocks are doing better than BTC 2 hours ago Circle Q4 earnings beat estimates as USDC issuance grows, shares surge pre-market 2 hours ago U.S. Senator opens probe on Binance over alleged $1.7 billion flow to Iranian entities 3 hours ago Crypto rebounds from oversold levels, altcoin season indicator revisits January high 3 hours ago Top Stories Vitalik Buterin sold 17,000 ETH this month as ether fell 37% 7 hours ago One of longest mining capitulations nears end, signaling potential BTC price bottom 3 hours ago Crypto firm with U.S. bank charter holds bitcoin holder Strategy's preferred stock 8 hours ago Leading stablecoin Tether shrinks again as market cap looks set for second straight monthly drop 6 hours ago Mark Zuckerberg's Meta is planning stablecoin comeback in the second half of this year Feb 24, 2026 Crypto isn't losing to AI, its just 'capitalism doing its job,' says Dragonfly 17 hours ago In this article BTC BTC $ 66,462.03 ◢ 4.71 %