Investment company Morgan Creek, which manages $1.5 billion in assets, launched its own index cription Morgan Creek Digital Asset Index Fund, but declined to include some of the major cryptocurrencies. This writes Forbes.
For example, in the new Fund, which came from the American Asset Management company Bitwise not is represented cryptocurrency such as XRP, developed by the startup Ripple and Lumen (XLM) project Stellar, as their production was performed through the so-called PreMain.
“If there is a Central authority that controls 30% of the issue or more, we exclude this cryptocurrency from the index”, — said the partner of Morgan Creek Digital Anthony Pompliano. “We believe that it carries additional risks, which could not be, if her network was more decentralized”.
Index Fund offers a basket of the 10 largest crypto-currencies, weighted by market capitalization, which is rebalanced monthly. To fall within the Fund cryptocurrencies are imposed other requirements, such as custody decisions, and limiting the concentration of trade.
The formation of the Fund has considered the risks of centralization of crypto-assets due to the high probability of manipulation of their prices and possible questions of the regulators, if such assets will be recognized as securities.
“We are fully prepared and we believe we have created something that will attract institutional investors, regardless of the categorization of assets, they are securities or not,” said Pompliano.
According to a statement from co-founder of Bitwise hunter Holi, the main difference between Morgan Creek Digital Asset Index Fund from running his company Fund 10 HOLD the original of the inspection Committee, which included the CEO of Morgan Creek with mark Yusko, Pompliano and head of research at Bitwise Matt Hogan.
Hosli said that the Committee’s decision on the limitation of cryptocurrency preminum is due to two main factors: concerns about the potential for fraud, which have large asset holders, and regulators doubt for which a high degree of centralization is an additional base that allows you to accept the cryptocurrency security.
“Decentralization is the cornerstone of most of the block chain. When most of the assets is centralized, there are contradictions and complexities that separate us from what we expect to see in a public block chain,” said Hosli.
Morgan Creek Digital Asset Index Fund is already available to institutional and accredited investors. Holy promised that the Fund will undergo the audits of the company Cohen & Company starting this fall, the results of which will be published on an annual basis. The first report will be submitted in early 2019.
“Together with Bitwise we have created a product that we hope will become the standard for the industry, as S&P became the standard for index securities,” said Yusko. “This is our long-term goal.” Discuss current news and events on the Forum