Morgan Creek Digital has become the first US pension fund to enter the crypto asset universe, joining the likes of Yale University, the second largest legacy in higher education.
This has come after the US national debt has just crossed the landmark level of $22 trillion and the need to devise a potential solution to solve the impending pension crisis in the US. Currently the global debt is hovering above $250 trillion, which is past the debt level of the previous global financial crisis (GFC), which we experienced in 2008.
Two pension plans in Fairfax County, Virginia have invested millions into the Morgan Creek Digital fund, launching the fund with $40 million in investable capital. Anthony Pompliano, Morgan Creek Digital co-founder and previous growth team member for both Facebook and Snapchat says that they’re
“getting off zero”.
Katherine Molnar, Chief investment officer of Fairfax’s Police Retirement Plan, one of the investors, stated that block chain technology is being “applied in unique and compelling ways”; ultimately this offers an “attractive, asymmetric return profile”.
Morgan Creek Digital makes this bold move due to their belief that all traditional assets will eventually be represented by digital tokens, while the influx of intellectual capital into digital assets will create positive returns, giving investors unique exposures.
The new fund is structured much like a traditional venture capital fund; it is set to invest in the equity of companies that are involved in the block chain and digital asset business.
Morgan Creek has already put the funds into profitable action with a number of prominent investments already being made. Some of these include Bakkt, Coinbase, Harbor and Blockfi.
The fund is also set to hold a small percentage in liquid crypto currencies, specifically Bitcoin and Ethereum. Pomp believes that these are
“the holy grail of any portfolio”.
Australia is set to follow the same direction with many Self Managed Super Funds looking to hedge against the traditional markets, such as the domestic real estate market, which has been consistently heading for a downturn due to the ever rising interest rates, the tightening of lending from banks and the ultimate roll back of interest only loans.
With the introduction of new foreign investment rules in Australia this has seen a major reduction in the interest in purchasing property in Australia, with experts predicting that real estate markets across the country could drop as much as 40 per cent over the next two years.
This follows the boom and bust trend that we have seen over the years in both property and the stock markets. If we follow these trends, every 10 years there is a stock market crash, we are now into our 11th year, and as experts predict we are bound to experience the 40 per cent drop sooner rather than later.
This solidifies the need for companies, local and global, and for people with personal portfolios to start investing in more valuable assets such as crypto mining. Ensuring they are giving themselves the best possible financial opportunities, setting themselves up with an attractive and lucrative digital asset portfolio.