Crypto Index Fund Launched By Morgan Creek, Bitwise

Announcements, Investing, News | August 29, 2018 By:

Digital asset management firm Morgan Creek Digital has partnered with crypto investment startup Bitwise Asset Management to create a new crypto index fund aimed at institutional investors.

The Digital Asset Index Fund will provide endowments, foundations, pensions, wealthy families, and sovereign wealth funds access to broad-based digital asset exposure. The fund holds a market-cap-weighted basket of the top 10 largest cryptocurrencies, reconstituted monthly. These digital assets will go through rigorous, rules-based eligibility requirements including custody qualifications, trade concentration limits and pre-mine restrictions. All assets will be kept in cold storage to improve their overall security.

“Every investor should be considering an allocation to digital assets right now,” said Mark Yusko, CIO at Morgan Creek. “Increasingly, institutional investors are coming to us asking for exposure to the space. We wanted to create a vehicle tailored for those investors. Bitwise was the ideal partner to do this with because of their institutional approach, experienced team, and track record of success.”

The fund combines Bitwise’s quantitative index rules and professional fund management with the ongoing oversight of an index committee including Yusko, as well as Anthony Pompliano, Partner at Morgan Creek Digital, and Bitwise Global Head of Research Matt Hougan.

“Institutional investors are seeing the market pullback as an opportunity start building exposure to the space, and have been pushing us to get this fund to market quickly,” said Pompliano. “We’re excited to have The Digital Asset Index Fund up and running, creating a one-stop shop for institutional investors intent on securely capturing the significant value creation taking place in the crypto market today.”

The Digital Asset Index Fund will include bitcoin, ether, Bitcoin Cash, EOS, Litecoin, Ethereum Classic, Zcash, Monero, Dash and OMG. IOTA and cardano were excluded from the list for not meeting Bitwise’s cold-storage custody requirements. Pre-mine coins such as Ripple’s XRP and Stellar’s lumen were also excluded because of concerns over its significant concentration in the ownership.

“If there’s a central party that owns 30% or more of supply, then we withhold those from the index,” said Pompliano. “Because we think that introduces a lot of additional risk that may not be there if it was a more decentralized network.”