In another step toward normalizing crypto and digital product investing, Morgan Creek Digital, which is backed by Morgan Creek Capital Management, a multibillion-dollar hedge fund, and Bitwise Asset Management announced their partnership to create the Digital Asset Index Fund. The fund will trade the largest investable digital assets and track the Morgan Creek Bitwise Digital Asset Index (DAI), which is overseen by an advisory team made up of Morgan Creek and Bitwise specialists. The fund will be open to institutional investors.
“Every investor should be considering an allocation to digital assets right now,” Mark Yusko, chief investment officer at Morgan Creek, said in a statement. He added that his firm has been increasingly asked by their clients to gain exposure in the digital space, and they selected Bitwise as a partner because of its “track record of success” as a leading provider of cryptocurrency indexes and index funds. Bitwise will serve as the manager on the fund.
As of Aug. 27, the DAI was made up of 69.6% Bitcoin, 15.4% Ethereum, 5.5% Bitcoin Cash, 2.9% EOS, 2.3% Litecoin, 1.1% Dash, 1.1% Zcash, 1.0% Monero, 0.9% Ethereum Classic, and 0.2% OmiseGO.
Since Jan. 1, 2017, the DAI has been up just over 737%, while Bitcoin has been up almost 600%. However, since Jan. 1, 2018, the DAI has been down 58% while Bitcoin has been down just over 51%.
All fund assets will be kept in cold storage and makeup will be reconstituted monthly to avoid churn, according to Morgan Creek.
Morgan Creek Capital was launched in 2004 by Yusko, who previously had been president, chief investment officer and founder of UNC Management Co., which was the endowment office for the University of North Carolina – Chapel Hill. Prior to that, he was senior investment director for the University of Notre Dame Investment office.
Morgan Creek Digital was founded this year by Yusko, Jason Williams and Anthony Pompliano. Yusko and Pompliano, who came on board with Morgan Creek’s purchase in March of Full Tilt Capital, which had “extensive experience in asset tokenization and blockchain technology investing” according to Yusko’s Q1 2018 investment letter, will represent Morgan Creek on the Index Policy Committee overseeing the index. As Yusko wrote, “We have gone from spending minimal time thinking about investment opportunities related to blockchain technology five years ago to over half of our time today….”
Bitwise, which was founded in 2017, was a pioneer in launching a cryptocurrency index fund. It will be represented by Global Head of Research Matt Hougan on the policy committee.
— Related on ThinkAdvisor:
- Bitwise Files for First ETF Based on Cryptocurrency Index
- ETF Veteran Goes Crypto, Predicting Multitrillion-Dollar Market
- Blockchain’s Latest Twist: Digitizing Company Shares