There Are Now Two U.S. Pension Funds Based on Crypto-Investments

There Are Now Two U.S. Pension Funds Based on Crypto-Investments

For the first time, the United States has its first crypto-based pension fund. Two pension plans in Fairfax County, Virginia will now be anchored to a $40 million venture-capital fund owned by Morgan Creek Digital.

The only way towards cryptocurrency adoption is through the approval of established institutions and their assets. Crypto needs to be packaged with existing assets to be widely accessible. With the Nasdaq and Fidelity bank, among many others, showing interest long-term in the blockchain space, it is only a matter of time before cryptocurrencies become a common part of investment packages.

However, now we have our first example of such a package in the United States. Morgan Greek Digital is offering a $40 million venture-capital fund to pensioners in Fairfax County, Virginia. Other investors in the fund includes “an insurance company, a university endowment, and a private foundation,” according to Morgan Creek Digital founder Anthony Pompliano as reported by Bloomberg.

Calculated Risk

Pompliano told Bloomberg that the crypto-based pension fund will be structured like a traditional venture capital fund, but will be investing in equities of companies within the blockchain space. The fund will also hold a small portion of its overall value in Bitcoin and other cryptocurrencies.

Pompliano commented on the new announcement in a phone interview:

“There’s a belief in the institutional world that if the industry will be around for a long time, it will be very valuable… The smart money is not distracted by price but looks at the long-term trends, and believes they’re betting on innovation as a great way to deliver risk-mitigated returns.’’

Because the fund is investing in blockchain-based companies, and not completely in volatile cryptocurrencies, the pension fund is a calculated risk for which the odds are very much in the pensioners’ favor.

Morgan Greek Digital is an affiliate of the investment management firm Morgan Creek Capital Management LLC. The company exceeded their $25M expectation for this venture capital fund which now stands at $40M. It is their belief that most if not all assets will be tokenized in the future, with many falling into the category of security tokens.

Any thoughts on this exciting news? Would you trust your investments in a blockchain-based fund? Let us know your thoughts in the comments.

Image courtesy of iStockphoto.

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