The University of Pennsylvania’s famed Wharton School of Business has received a $5 million donation in bitcoin, the largest gift the Ivy League school has accepted in cryptocurrency, as it opens up a new way for alumni to give.
The anonymous donation, which will aid financial technology programs at the business school, “marks a new era and mode of giving to the university,” said Wharton dean Erika James, in a statement released Thursday.
It follows on the heels of the university accepting its first cryptocurrency gift from an alum in January, said John Zeller, senior vice president of development and alumni relations, in an interview with MarketWatch.
Cryptocurrency donations to the school are processed through NYDIG, the bitcoin subsidiary of alternative asset manager Stone Ridge, and sold immediately, according to Zeller. The university selected NYDIG as a partner partly because the school wanted to avoid creating its own wallet and can rely on the firm for due diligence, he said.
“If a donor wants to make a gift using bitcoin, they work with NYDIG,” said Zeller. While the University of Pennsylvania has the option to hold the cryptocurrency, “we sell it the moment it’s received” as a general rule, he said.
The $5 million bitcoin donation will benefit Wharton’s Stevens Center for Innovation in Finance, a fintech center that has been drawing increasing interest from Penn students, according to the university. They are learning about “the digital currency ecosystem” by engaging with business school faculty and leaders at financial institutions, the Ivy League school said.
University of Pennsylvania can accept donations in cryptocurrencies beyond bitcoin, according to Zeller. They are another way to make a payment, he said, adding that the school isn’t receiving such gifts to make a profit on their future value.
It has been a turbulent week for cryptocurrencies, as well as U.S. stocks.
At last check Wednesday, Bitcoin
was changing hands around $38,000 on CoinDesk, up from a 24-hour low of $30,201.96 before bouncing back. The cryptocurrency has plummeted from an all-time high of more than $64,000 in April, according to CoinDesk, but was still up about 31% for the year, based on trading Wednesday.
That compares with an S&P 500 Index
gain of 9.6% this year through Wednesday, the Dow Jones Industrial Average’s
10.8% climb and the Nasdaq Composite Index
advancing 3.2% over the same stretch, according to FactSet data.
Some bitcoin bulls still may be reluctant to let go of their cryptocurrency.
Tim Draper, founder of venture-capital firm Draper Associates, said during MarketWatch’s online crypto event in April that when he was “giving money to Stanford” the university expressed a desire for bitcoin over fiat currency. “I said ‘no way,’” Draper recalled at the MarketWatch and Barron’s Investing in Crypto event, adding that he similarly wouldn’t be inclined to sell bitcoin.
“Why would I want to take the currency of the future and move it to the currency of the past?” he said at the event, comparing the idea to turning euros into drachma or French francs.
Stanford University “is able to accept gifts of some types of cryptocurrency, including bitcoin,” a spokesman for the school said in an email. “We work with each donor individually to accommodate the asset being offered.”
“From a fundraising standpoint, I think this is just another arrow in the quiver,” Zeller said of crypto donations. “It’s another tool to respond to what donors’ interests are.”