Morgan Creek Digital and Bitwise Just Launched a New Digital Asset Index Fund
Morgan Creek Digital and crypto index provider Bitwise are teaming up to launch a new index fund aimed at institutional investors. The “Digital Asset Index Fund” will hold the top 10 largest cryptocurrencies by market capitalization.
The index fund will be available to accredited investors and other major institutions. Bitwise will manage the fund itself.
As you might expect, the fund leans heavily towards bitcoin. Today, bitcoin’s market dominance sits at 53%, which suggests that the new fund would hold 53% bitcoin.
Investors who buy a share of the fund would also get exposure to other top 10 digital assets, including Ethereum, Ripple, Bitcoin Cash, EOS, Stellar, Litecoin, Cardano, IOTA, and TRON.
In a statement to CoinDesk, Anthony Pompliano, cryptocurrency bull and partner at Morgan Creek Digital, said that the 2018 bear market presents a great opportunity for investors to build out their exposure to the market:
“We have been approached by many institutional investors who want to gain exposure to digital assets. By partnering with Bitwise, the leading crypto index provider, we are able to bring an institutional-grade solution to these clients. The crypto industry continues to mature and we see this as another milestone along the way.”
The fund will emphasize simplified access to crypto markets. Assets held by the fund will be kept in cold storage to enhance their overall security. Assets are governed by a set of eligibility requirements including custody qualifications, trade concentration limits, and pre-mine restrictions.
The fund will also be secured by regular audits. Auditors will verify that the fund legitimately holds the assets, giving investors an extra layer of security.
By partnering with Bitwise, Morgan Creek Digital can use the firm’s expertise within the crypto index fund space. Bitwise also offers private cryptocurrency index funds to accredited investors. Meanwhile, Bitwise is also reportedly preparing to launch its own exchange traded fund (ETF) based on the top 10 cryptocurrencies by market cap.
Today, investors use index funds to track the overall performance of a market or asset without actually owning the entire market or the physical asset. Many investors wish to gain exposure to bitcoin and other cryptocurrencies without actually worrying about cold storage, security, and purchasing the crypto-assets. ETFs and index funds will help. Although they’re currently only available to institutional investors, these index funds could appeal to retail investors in the very near future.