Sociologist Zhao Dingxin: University of Chicago's "Crypto Trading" Massive Losses, Financial Imbalance Leads to Humanities Department Cuts

Sociologist Zhao Dingxin revealed losses from crypto trading at the University of Chicago; financial reports show a loss of $19 million in 2021-2022 (not rumors of 6 billion). Harvard holds a $160 million BTC ETF, Yale has布局 through a16z, and the University of Chicago’s annualized return is 7.48%, far below the stock market, with liberal arts becoming the scapegoat for financial issues.

Nobel Economists’ Guidance on Crypto Trading Rumors Spark Controversy

On January 13, renowned sociologist Zhao Dingxin stated in an interview that the University of Chicago, where he taught for many years, cut back on liberal arts programs, unrelated to President Trump’s policies, but allegedly because “they lost over sixty billion dollars trading cryptocurrencies.” Zhao further said, “It is said that the university seems to have listened to investment advice from certain Nobel laureates, resulting in losses of over sixty billion dollars.”

This statement is full of dark humor. The University of Chicago is famous for the “Chicago School of Economics,” with 15 Nobel laureates (who were faculty at the time of winning). Yet, it apparently crashed in crypto trading? Yang Xiaokai’s wife recalled that initially, Yang Xiaokai held the family’s economic power, but after several trades, they lost all their stocks and futures. She said, “I was very skeptical of his economic research. If I didn’t take control, we would go bankrupt.” This “economist slap in the face” hell joke is now replayed at the University of Chicago.

Regarding the university’s ironic and unorthodox investments, rumors have circulated among students and on social media. During the 2024 student protests supporting Palestine, the university’s long-standing independent student media, The Chicago Maroon, disclosed that the university gambled heavily on cryptocurrencies and lost $20 million. Regardless of the scale of these rumored losses, the university denied them but confirmed involvement in crypto: “Our investment in cryptocurrencies is relatively small, but over the past five years, it has more than doubled.”

Stanford University’s student newspaper, The Stanford Review, sarcastically commented: As a top ten university known for pioneering modern economics—and nurturing the “Chicago School” with fiscal discipline—at least it should match peer institutions in fiscal discipline and investment performance, let alone market benchmarks. Yet, it has failed even that. The core issue is whether private American universities with large endowments and high tuition are engaging in “unorthodox” high-risk investments—are they treating the university as a hedge fund, and the university treating itself as retail investors?

Financial Reports Reveal the Losses Were Much Lower Than Rumors

(Source: University of Chicago)

In a Q&A update in December 2025, the university stated, “Contrary to some news reports, the University of Chicago has not suffered losses in cryptocurrency investments. Our crypto investment scale is relatively small, but over the past five years, it has more than doubled.” In short, the official statement is that they traded crypto, but didn’t lose money—they even made a profit.

However, the university might not be entirely truthful. According to reports from Stanford University’s newspaper, the Financial Times, and Investopedia in 2025, four sources indicated that “the University of Chicago invested in cryptocurrencies around 2021 and lost tens of millions of dollars.” Looking at the university’s financial statements, in FY2022, the Bitcoin holdings were reported as: $64 million as of June 2021; $45 million as of June 2022. Within a year, roughly $19 million was lost. In 2023 and subsequent reports, the university changed its accounting methods and no longer mentions cryptocurrencies.

Combining all information, the university’s losses mainly occurred during the epic Bitcoin crash of 2022, when Bitcoin fell from its 2021 high of $65,000 to $15,000, Terra, Luna, and Three Arrows Capital collapsed, and FTX went bankrupt at year’s end. Even with Nobel laureates’ guidance, losses were unavoidable.

But the losses did not reach Zhao Dingxin’s rumored “over 6 billion dollars.” The university’s endowment is only about $10 billion; a loss of $6 billion would be headline news. Even if some “rational” economists are occasionally unreliable, it doesn’t mean the fund managers would recklessly hold large positions in Bitcoin. So, although Chicago University lost nearly $20 million during Bitcoin’s downturn, compared to total deficits of over $200 million (FY2023) and nearly $300 million (FY2024), this amount isn’t too significant.

Prestigious Schools’ Crypto Trading and Yale-Harvard Presence

Crypto trading is not unique to Chicago University among elite American colleges. Harvard, Yale, Brown, Michigan, Emory, and other top liberal arts schools are also involved in the crypto world. Against the backdrop of declining liberal arts, these elite schools’ high-risk investments carry a darkly humorous tone.

Harvard’s endowment exceeds $50 billion, holding about $160 million in Bitcoin ETFs as of June 2025, with rumors of crypto fund investments since 2018. Yale’s endowment is around $30 billion; although it hasn’t publicly disclosed holdings, it has indirectly invested in cryptocurrencies via venture funds like Paradigm and a16z since 2018. Brown University disclosed holding about $4.9 million in Bitcoin ETFs in May 2025. Emory University increased holdings to approximately $52 million by Q3 2025. MIT invested in blockchain-focused venture funds in 2018.

Overview of US Elite Schools’ Crypto Investment Scale

Harvard University: Holds $160 million in BTC ETF, investing in crypto funds since 2018

Yale University: Indirect investments via Paradigm, a16z, etc.

Brown University: Holds $4.9 million in BTC ETF

Emory University: Holdings increased to $52 million

University of Chicago: Lost about $19 million in 2021-2022

Private American universities are essentially venture capital entities. Following prudent investment principles, they diversify into stocks, bonds, venture capital, private equity, hedge funds, real estate, and cryptocurrencies. This diversification strategy is understandable, but when investment performance consistently underperforms benchmarks, problems arise.

For private universities, cutting liberal arts is just an inevitable consequence of their investment-oriented approach. Last summer, Chicago University announced suspending most PhD programs in arts and humanities for 2026-2027; Harvard College canceled over 20 departments and more than 30 courses in fall 2024; Boston University paused several humanities and social sciences PhD programs for 2025-2026; Northeastern University stopped recruiting sociology PhDs.

Poor Investment Performance Is the Real Culprit for Cutting Liberal Arts

Chicago University’s long-term financial pressure mainly stems from high debt, high deficits, and poor investment returns—earning less than spending. Stanford’s analysis suggests that if Chicago’s investments had matched benchmarks, it could have covered its 2024 debt gap. Between 2013 and 2023, the university’s endowment returned an annualized 7.48%, compared to 12.8% for the stock market and 10.8% for Ivy League averages.

If Chicago had simply matched market performance, its endowment would have been about $64.5 billion higher. This hypothetical fund could have repaid the $6.3 billion debt in 2024. Even if it didn’t reach stock market benchmarks, matching other Ivy League investment returns would have earned an extra $30 billion. Yet, with the Chicago School of Economics and 15 Nobel laureates, their “empirical asset pricing” analysis seems less “practical.”

By 2025, the university’s debt reached over $9 billion, about 90% of its endowment. Although debt financing costs are relatively low, the annual interest alone is over $200 million. Since the 21st century, Chicago has built numerous labs, libraries, dorms, and invested heavily in new tech, all financed by debt.

Most ironically, from 2006 to 2022, the president’s base salary increased by 285%. Assets can be sold, liberal arts can be cut, faculty can be laid off, students can be phased out, but leadership salaries must rise. To make matters worse, early 2025 saw the NIH sharply cut indirect costs for university research, costing Chicago about $52 million annually.

Liberal Arts as Scapegoat for Financial Imbalance

In September 2025, Deborah Nelson, dean of the arts and humanities at Chicago, explained that suspending many PhD programs was directly related to the university’s long-term financial pressures. However, in the context of its financial crisis and reduced external subsidies, the blame on liberal arts is purely scapegoating.

According to Clifford Ando, a classical studies professor, humanities are among Chicago’s most self-sufficient disciplines, with 98% of academic salaries funded by undergraduate tuition and endowment income, relying little on federal grants. Yet, the humanities are made to “pay the bill” for the entire school’s financial imbalance. This reveals a harsh reality: under the trend of increasing venture capitalization of private universities, disciplines that don’t generate direct economic returns are the first to be sacrificed.

The most shocking aspect of the “cutting of liberal arts” is perhaps the 2025 shutdown of the Strauss Center at Chicago. The Strauss School was introduced in the early 21st century by scholars Gan Yang and Liu Xiaofeng, inspiring a wave of “classical political philosophy” that aimed to awaken “Chinese civilization consciousness,” influencing generations of intellectuals born in the 70s and 80s.

In a university driven by financial difficulties, to stay competitive in technological innovation, resources tend to be diverted toward high-revenue research fields like STEM, making cuts in liberal arts a form of “replacing the cage with a bird”—freeing up space for promising disciplines. Today, American liberal arts colleges face multiple financial pressures: tightening federal policies, leveraging funds under the Trump administration, and the job market favoring STEM careers with higher starting salaries, leading students and parents to worry about low “return on investment” in liberal arts.

Universities as Venture Capitalists: A Dark Humor

Thus, the profit-driven approach of these private universities often appears less “noble” than their liberal arts education. From crypto speculation, they resemble venture capital firms chasing short-term gains and market trends. After the heated debate over university crypto trading, some academics revealed that Chicago’s two popular programs, MAPSS (Master of Arts in Social Sciences) and MAPH (Master of Arts in Humanities), are like “raising worms,” with no scholarships and annual tuition of $80,000, and an increasing trend of issuing “admission offers”—over 1,200 applicants, with about 600-700 admitted.

Returning to Zhao Dingxin’s statement that “Chicago University seems to have cut back on liberal arts due to crypto trading losses,” this is untenable. What’s more thought-provoking is that the fact of university crypto trading and liberal arts cuts are strangely intertwined, presenting a style of American “dark humor.” How can these highly opportunistic universities teach students who are less opportunistic? And can math, engineering, science, and technology alone truly solve humanity’s growing moral and emotional crises?

Considering that last year’s crypto trading—initially $97,900 at the start of the year and $87,400 at year’s end—did not increase the university’s deficit, the proportion of Bitcoin in its asset allocation is evidently small. If conditions improve in 2025, with deficits reduced by nearly $120 million compared to the previous year (a 45% decrease), it suggests Chicago has learned its lesson and reduced high-risk crypto holdings.

The decline of liberal arts is not without reason. But when educational institutions themselves become speculative tools, and even Nobel laureates’ advice cannot prevent investment crashes, this absurd reality may be precisely what humanities should critically examine and reflect upon.