Author: Darren Terminator

Recently, Jiemian News took the opportunity of the publication of the third edition of Professor Zhao Dingxin's "Lectures on Society and Political Movements" (the second edition of this book is truly excellent) to interview Professor Zhao. In the interview, Professor Zhao stated that the recent budget cuts at the University of Chicago are due to "allegedly the university seems to have listened to some Nobel laureates' investment advice, losing over six billion dollars in cryptocurrency trading. It can be said that the reduction in the humanities at the University of Chicago has nothing to do with Trump's policies."

So did the University of Chicago really lose over six billion dollars in cryptocurrency trading?

Coincidentally, in the Q&A updated by the University of Chicago in December 2025[1], the issue of cryptocurrency trading was mentioned. According to the official website, "Contrary to claims in a certain news report, the University of Chicago has not suffered losses in cryptocurrency investments. Our investment in cryptocurrency is relatively small, but it has more than doubled over the past five years. Our investment goal is to provide a stable source of income to support various projects at our university and ensure our future."

So can we trust that the provost of the University of Chicago is telling the truth?

It's hard to say. However, intuitively, the total amount of donations to the University of Chicago over the past five years is around ten billion dollars (the fiscal year 2021 was a record high, approximately 11.6 billion dollars; the fiscal year 2025 is about 10.9 billion[2]). Unless the University of Chicago is truly reckless enough to use at least 60% of its endowment to trade cryptocurrencies (which clearly violates various regulations), or misappropriates a large amount of operating funds for cryptocurrency trading and loses it all, it should not have lost as much as six billion dollars.

So how much did they actually lose? Or is it really as the official Q&A states, that they made a fortune?

The Stanford University newspaper[3], the Financial Times[4], and Investopedia[5] reported on this matter last year. According to the Stanford newspaper, four of their sources indicated: "The University of Chicago lost tens of millions of dollars due to investments in cryptocurrency around 2021."

What does the financial report of the University of Chicago[6] say?

Unfortunately, the financial report does not directly tell us how much was lost in cryptocurrency trading. However, in the fiscal year 2022 financial report, the University of Chicago disclosed its cryptocurrency investments (fair market value): approximately 64 million dollars as of the end of June 2021, and about 45 million dollars as of the end of June 2022 (a difference of about 19 million dollars). In subsequent financial reports, perhaps due to making a profit or suffering losses, the University of Chicago changed its reporting method and no longer disclosed its cryptocurrency investments. However, according to the Q&A in 2025, the University of Chicago is still relatively cautiously investing in cryptocurrency.

It is worth noting that the 2022 financial report shows that as of the end of June that year, the total loss from the University of Chicago's endowment investments was as high as about 1.5 billion dollars. The 2023 financial report indicated that the University of Chicago's investments only incurred a small loss. In the following two years, the University of Chicago turned a profit.

However, we do not know how much of these losses and profits came from cryptocurrency trading. The Stanford University newspaper provided a somewhat unreliable clue: "The target asset allocation of [the University of Chicago] shows that the ideal allocation ratio for the university's investments in private debt and 'absolute return' type investments (which include alternative assets like cryptocurrency) has decreased from 25.5% in 2020 to 20% in 2022, indicating a significant withdrawal (or decline) from high-risk alternative assets."

However, the Stanford University newspaper also made an interesting observation: "From 2013 to 2023, the annualized return rate of the University of Chicago's endowment was only 7.48%, while the annualized return rate of the stock market during the same period was 12.8%, and the average level of Ivy League schools was 10.8%. If the University of Chicago had simply followed market performance, its endowment would now have an additional 6.45 billion dollars. Moreover, this (dream) fund would be more than enough to pay off all the school's debts. Of course, universities cannot simply replicate market indices, as they must hedge during economic downturns to maintain financial stability. But even if the University of Chicago only achieved the average level of its Ivy League peer group, its endowment would still have an additional 3.69 billion dollars, which would be enough to cover the school's current budget deficit for the next 15 years."

However, besides cryptocurrency trading and investment losses, what other reasons could explain the budget cuts at the University of Chicago?

Common explanations, aside from the notion that Trump is a rogue, often emphasize the University of Chicago's own strategic missteps: borrowing and leveraging, extensive infrastructure development, and aggressive expansion.[7][8] As of the end of June 2025, the University of Chicago's debt was about 9.2 billion dollars[9], approximately 90% of its endowment. Although the financing costs of these debts are relatively low, unlike those across the ocean, the interest that the University of Chicago needs to pay this fiscal year still amounts to over 200 million dollars.

Such high debt certainly did not come from nowhere. Since the new century, the University of Chicago has spent heavily on new laboratories, libraries, dormitories, technology, etc., to enhance its reputation and enrollment, and to compete with various prestigious schools, with much of this expansion supported by substantial borrowing. However, the new infrastructure brings ongoing operational costs, and the school has not figured out how to sustain it long-term.

The Stanford University newspaper[10] quoted Professor Clifford Ando of the university, stating that any parents wanting to send their children to the University of Chicago need to consider whether the tuition they pay is truly for their child's education or if it is merely covering the school's debt. The reckless expansion and the resulting debt issues are clearly the responsibility of the school's management, who have been overly ambitious. Ironically, the base salary of the president increased by 285% from 2006 to 2022. Now, when faced with some economic issues, the management shifts the difficulties onto students and general faculty: even in years of asset sales, layoffs, and enrollment freezes, senior salaries continue to rise.

So what should the University of Chicago do next?

In addition to continuing to cut costs, they certainly need to increase revenue. Clearly, a common tactic for American universities to raise more money is to enroll more undergraduate students. The University of Chicago is set to do this, but the reasons will surely be presented in a grandiose manner.

[1]https://provost.uchicago.edu/actions-budget

[2] The budget, endowment, and debt of the University of Chicago mentioned in this article are calculated for the main campus, the Medical Center, and the Marine Biological Laboratory combined. Common news reports (especially the University of Chicago's own promotional materials) usually combine calculations for the endowment but only account for the main campus in terms of debt.

[3] https://stanfordreview.org/uchicago-lost-money-on-crypto-then-froze-research-when-federal-funding-was-cut/

[4] https://www.ft.com/content/4501240f-58b7-4433-9a3f-77eff18d0898?utmsource=chatgpt.com_

[5] https://www.msn.com/en-us/money/careersandeducation/university-s-investment-losses-spark-outrage-resulting-in-drastic-program-cuts/ar-AA1Nxhgx

[6] https://intranet.uchicago.edu/en/tools-and-resources/financial-resources/accounting-and-financial-reporting/financial-statements

[7] https://www.wsj.com/us-news/education/colleges-face-a-financial-reckoning-the-university-of-chicago-is-exhibit-a-8918b2b0

[8] https://www.ft.com/barrier/corporate/d5c7c0f4-abf1-4469-8dca-87ff01cbebf6

[9] The debt of the main campus is about six billion dollars. Perhaps this is the source of Professor Zhao's six billion dollars.

[10] https://chicagomaroon.com/40486/news/uchicago-professor-sounds-alarm-over-troubling-university-finances/

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