Institutional investors are being cautioned that their traditional investment frameworks are ill-suited for the cryptocurrency market, according to Jeff Park of Bitwise Asset Management. Park argues that the conventional approach—focused on locking capital in long-term, illiquid assets—fails to account for the unique characteristics of digital assets. Instead, he suggests that institutions should embrace liquidity and volatility as assets rather than risks, adopting strategies like market-making, arbitrage, and trend-following to capitalize on the dynamic nature of the space [1].

Park contrasts the crypto market with the Yale endowment model popularized by David Swensen, where high allocations to alternatives are held for years or…