Morgan Creek Digital Announces $40 Million Crypto Venture Fund Backed by Pensions

On Tuesday February 12, US-based digital asset firm Morgan Creek Digital announced that they have raised $40 million for a venture capital fund to invest in blockchain startups.

The Fairfax County Police Pension and Fairfax County Employee’s Plan are the two biggest investors in the fund, and other investors include a university endowment, a private foundation, and an insurance company. A partner at Morgan Creek Capital, Anthony Pompliano, also invested but has declined to give further details regarding the amount.

Morgan Creek Capital partner Anthony Pompliano tweeted:

“This morning our team at Morgan Creek Digital announced a new $40 million crypto venture fund anchored by two public pensions.

The institutions aren’t coming.

They’re already here.”

Many investors have been wary of cryptocurrency due to its reputation of high volatility and lack of regulation, but we are seeing more investors seeking opportunities in the crypto space, why is this? The tide of public opinion on cryptocurrencies is shifting in their favor.

The global economy is slowly moving towards digital. Using cash as a means of payment is dwindling year on year and experts predict that we are heading towards a cashless society. Mistrust of banks is still relatively high, and concerns about personal privacy are rising. Cryptocurrency answers all of these problems, making it seem attractive. Adding to that, governments and trusted companies now have a more positive attitude towards cryptocurrency and are actively looking at ways to engage with it.

Pompliano has stated that the fund is structured like a traditional venture capital fund that will invest in blockchain and digital asset companies. The fund will also hold a small percentage of value cryptocurrencies such as Bitcoin. It is estimated that as much as $4 million may be used to buy cryptocurrency.

In a phone interview Pompliano said:

“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.”

According to Forbes, the fund has already invested some money into blockchain startups, for example, the Bakkt exchange platform, TrustToke, and Coinbase.

There is still some debate about whether cryptocurrency is a good way to secure a retirement fund. CNBC published an article in April 2018 speculating that 2018 would be the year that pension and endowment funds invest heavily in cryptocurrency. That wasn’t the case for 2018, but the prediction for the near future still stands. However, also in 2018, the SEC warned against cryptocurrency investment as the sole means of a retirement fund.

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