US Endowments and Abu Dhabi SWF Buy Bitcoin, CBDC Delays, HK’s Crypto Move & Valentine’s Day on Blockchain(#202 - Feb 16)

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1. US endowments starting to build crypto portfolios?

U.S. endowments are starting to build crypto portfolios. This is very positive and welcome news. Whilst these institutions are doing so mainly via Bitcoin ETFs at the moment, the natural next step for them is to start investing in crypto funds.

Many large U.S. endowments, from Yale to Harvard, pioneered hedge fund investing and the risk-adjusted returns of many crypto hedge funds make them very attractive for such institutions.?

This also matters as the endowment (and foundation) investor ecosystem often follows (or copies) each other. So if one does it, others will often also do it. Definitely a development to follow.

2. Abu Dhabi SWF bought over $400m in Bitcoin in Q4

Whilst this is lots of Bitcoin, it’s still a very small percentage of total assets of not only Abu Dhabi’s Mubadala SWF (sovereign wealth fund) but also total assets held by SWFs globally.?

Most importantly this eliminates the career risk for any risk officer in any of these SWFs globally (where such staff have limited personal upside of making such decisions but rather more downside of losing a comfortable, well-paid and stable job).

And as large and reputable players like Abu Dhabi’s SWF start buying Bitcoin, you should expect those lower down the chain to start looking at it including pension funds, endowments, foundations, etc.

3. A third of central banks looking at launching a CBDC have delayed their timeline.?

This is not a surprise. Those who follow my content will know that this is something that I listed in my 2025 crypto predictions.?

This is mainly due to the change of guard in the US, as Republicans and President Trump are staunch anti-CBDC advocates, and due to the US influence on most global organisations, including the BIS, the IMF, the World Bank and SWIFT.?

The recent cancellation from the BIS of Project mBridge, probably the most successful CBDC initiative globally, due to concerns that the likes of Russia and the BRICS would be inspired to build their own version of SWIFT on blockchain, is a good example.

Ironically, and mainly driven by geopolitics, CBDC activity could be expected to continue in emerging markets this year, especially if these countries decide to build their new SWIFT equivalent. But we should expect CBDC activity to slow down overall in Western or US aligned countries.?

4. HK confirms BTC/ETH can be used to prove wealth for investment visas

This policy makes sense as it allows HK to attract the large amount of individuals in Asia (mainly young ones) that hold lots of Bitcoin and crypto and not much traditional assets. Many similar schemes don’t recognize crypto as a legitimate asset.

In practice, any applicant in this scheme will need to invest $HK30m (~$US3.8m) in other permissible assets which don’t include crypto.?

Will this make a major difference? In practice, no. But it will allow to attract wealthy crypto holders especially from Mainland China and SE Asia. But most importantly, it gives HK a good media story that it is becoming friendly again to crypto. Let’s not forget that HK courts have recognised Bitcoin as property since 2023.?

We should expect Bitcoin and other cryptos, generally,? to be considered as permissible assets in most if not all similar immigration/investment schemes globally in the near future.

5. Valentine’s Day: How Crypto & Love Are Coming Together

Valentine’s Day is upon us and love is in the air…even in the crypto world!

There have been many loving couples that have tried to bridge the gap between their love and crypto.

• For example, a couple of years ago one couple decided to immortalize their marriage for eternity on the Ethereum blockchain.

The couple actually created their own smart contract that issued a pair of tokenized wedding ring NFTs.

Factoring in Ethereum transaction fees, the smart marriage contract cost $537 to implement.

Compare that to your typical “real world” weddings with “old school” legal documents that are still signed by hand!

Surprisingly enough, this wasn’t even the first marriage on the blockchain, with one lucky couple tying the knot all the way back in 2014!

And more recently, one lucky couple in India decided to shift their nuptials to the blockchain as well.

This marriage between Anil Narasipuram and Shruti Nair garnered national attention when the couple tied the knot a couple of years ago with a digital priest!

Citing blockchain’s immutability and transparency, the couple’s wedding ceremony revolved around a smart contract on Ethereum, with the couple’s vows even minted as personalized NFTs!

The tokenized vows (and engagement rings) were then exchanged as a digital transaction on NFT marketplace OpenSea.

Who said that love and crypto couldn’t go together!

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*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with. This newsletter is for educational purposes only, and none of its content should be construed as investment or financial advice of any kind.