Top names in finance have also been publicly skeptical. J.P. Morgan’s Jamie Dimon called the digital currency a “fraud,” Warren Buffett likened it to “rat poison,” and Citadel’s billionaire hedge fund manager Ken Griffin compared it to the tulip mania of the 17th century.

A big challenge for venture investors is that crypto bets like tokens and digital currencies are very different from taking sizable equity stakes in start-ups, forcing risk-averse money managers to adapt to a whole new set of issues.

“People are excited about it but afraid of being the first, or having to explain themselves,” said Bill Barhydt CEO of cryptocurrency exchange Abra. “That’s the fear vs. greed of institutional investing. There’s a herd mentality there as much as there is in retail investing.”

Last year, bitcoin surged more than 1,000 percent to a high of almost $20,000, rewarding miners and enthusiasts. But the market has been beset of late by news of hacks, regulatory uncertainty and failed projects, and bitcoin’s price has dropped back to around $6,500. Some 223 funds dedicated to cryptocurrency popped up in 2017, up from just 23 funds the prior year. As of Sept. 1, there were a total of 389 global cryptocurrency funds, according to the latest data from Autonomous Next.

Still, firms like Andreessen Horowitz are focused on long-term investments in the space.

Chris Dixon, who runs Andreessen Horowitz’s crypto investments along with Katie Haun, told CNBC at the fund’s launch that these are “all-weather” bets that they’ll make over time regardless of market conditions. Over two to three years, the firm will invest in everything from early-stage coins and tokens to later-stage networks like bitcoin or ethereum, and will hold those investments for up to a decade.

Andreessen Horowitz was investing in crypto well before the dedicated fund, backing Coinbase in 2013. As of June, the firm said it had not sold any of its investments in crypto.

The fund is a sensible entry point for Swensen. Yale has been an investor in the firm’s previous funds as part of a portfolio that’s included investments in funds run by Benchmark and Greylock Partners.

Paradigm is a brand new firm that has not yet announced its existence, but it also has some familiar names for Swensen. Ehrsam comes from Coinbase, and Huang has been working at Sequoia, a firm that’s generated healthy returns for Yale.

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