Wharton Receives Anonymous $5 Million Bitcoin Gift

Wharton Receives Anonymous $5 Million Bitcoin Gift

Blink and you missed the biggest crypto crash since last March: having plunged as much as 40% on Wednesday, bitcoin is up 40% on Thursday almost wiping out all its previous day’s jarring losses, with ether up more than 50% off its lows. Which is good news not only for Tom Brady who BTFD, but for UPenn which according to Bloomberg was set to announce it received its largest ever donation in a cryptocurrency — $5 million in Bitcoin to support the activities of a research center at its Wharton school of business. Naturally, the donation which was anonymous, would have been much worse had bitcoin failed to rebound.

Even though the majority of the gift is still in the form of Bitcoin, John Zeller, Penn’s senior vice president for development and alumni relations, was unmoved despite the surge in volatility.

“There is protection for us on the downside,” Zeller told Bloomberg. “We have what we needed to support the budget and we’ll just see where it goes in the future.” Penn’s approach differs from that of the Massachusetts Institute of Technology, which has accepted Bitcoin donations since 2016, and which immediately liquidates gifts received in the cryptocurrency.

As Bloomberg notes, while Colleges typically sell gifts such as real estate and stocks right away to eliminate risks that come with holding and managing assets, in this case, the structure of the donation, which was received a few weeks ago, “allows Penn to capture any gains if the price of Bitcoin rises and protects it from losses if the value of the currency drops below that of the initial gift”, Zeller said.

The portion of the $5 million still held in Bitcoin will be monetized over the coming years to meet the budgetary needs of the Stevens Center, which promotes education and research in the field of financial technology and is named after Ross Stevens, the chief executive officer of Stone Ridge Asset Management.

“The beauty of this is the donor wanted to use Bitcoin as a vehicle and also had an interest in promoting it,” Zeller said. “For us, it is a bit of an experiment.”

Tyler Durden
Thu, 05/20/2021 – 21:00

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