Morgan Creek Capital Chief Investment Officer Mark Yusko is partnering with San Franciso-based Bitwise Asset Management to introduce The Digital Asset Index Fund. The new vehicle is designed to offer a one-stop shopping option for institutional investors like pensions, endowments and wealthy families and give them access to a diverse portfolio of digital assets.
The fund is structured as a partnership. Its minimum investment is $50,000.
“Every investor should be considering an allocation to digital assets right now,” said Yusko, who will be speaking at Financial Advisor’s Inside Alternatives & Asset Allocation conference in Las Vegas on September 25.
Earlier this year, Yusko, a contrarian investor who successfully ran the University of North Carolina’s endowment, announced that his multibillion-dollar investment advisory firm, Morgan Creek Capital, would be launching a major initiative in the digital asset space. That venture has now materialized in a new business unit, Morgan Creek Digital. It hired Anthony Pompliano and Jason Williams as partners at the new unit in April.
Speaking at John Mauldin’s Strategic Investment Conference in March, Yusko said he saw many similarities between the digital asset business today and the advent of the internet two decades ago.
Executives at Bitwise see the joint venture with Morgan Creek as a validation of the digital asset space. “They’re thought leaders, experts in asset allocation and have spent over a decade earning the trust of their clients and institutional investors,” said Bitwise CEO Hunter Horsley.
Prices of cryptocurrencies have declined dramatically since early in the year. That's one reason why Pompliano says institutional investors have viewed the collapse in prices as "an opportunity to start building exposure in the space, and have been pushing us to get this fund to market quickly."
The fund holds a market-cap weighted basket of the top ten largest digital assets, and is reconstituted monthly. Rules-based eligibility requirements include custody qualifications, trade concentration limits and pre-mine restrictions to qualify.
Pompliano and Yusko believe that, over the long term, the true value of digital assets will be realized in the vast networks they eventually create. Right now, it's unclear who the winners and losers will be. As they note, back in 1996, Google was the nation's 21st-ranked search engine.