Bitwise Says Institutions Are Overlooking Crypto’s Biggest Advantage
The post Bitwise Says Institutions Are Overlooking Crypto’s Biggest Advantage appeared on BitcoinEthereumNews.com.
Institutional investors have long been conditioned to chase the illiquidity premium, believing that locking up capital in private equity, credit, or venture will yield superior returns. However, according to Jeff Park, Active Portfolio Manager at Bitwise Asset Management and CIO at ProCap BTC, this framework does not translate well into crypto. Bitwise Says Institutions Need to Rethink Their Crypto Playbook Instead, Park advocates for liquid alpha, saying that this makes digital assets unique and institutions are missing out. Park made these remarks in a post, drawing on the legacy of David Swensen, the legendary Yale Endowment CIO. Swensen is renowned for popularizing the endowment model of allocating up to 70% of capital to alternatives. Swensen’s philosophy cemented the belief that patient, illiquid investments carry a return premium that justifies long lockups. However, Park contends that crypto operates by a different set of rules. “In crypto, I believe the term structure is in backwardation, where investors are overcompensated to invest at the near end of the curve versus the long end. You are paid handsomely to take liquid risks where the scorecard is generated every day without having to wait ten years,” Park explained. He pointed to the performance of trading strategies during volatile periods. For instance, while Bitcoin fell 7% in early April 2024, Park noted that market-making strategies annualized at 70%, with arbitrage delivering 40% returns. In his view, this kind of opportunity challenges the very foundation of illiquidity-based portfolio theory. I will double down on this view again and again and again— Outperform the “Bitcoin rate of return” https://t.co/l8nGjJmEiF — Jeff Park (@dgt10011) August 17, 2025 Institutions, however, continue to allocate heavily to crypto venture capital (VC), echoing patterns from their traditional playbooks. For the Bitwise executive, this overlooks the scalability and efficiency of liquid crypto markets, which…
Filed under: News - @ August 17, 2025 11:25 pm