t-shirt salesman Anthony Pompliano told Bloomberg this morning that two Fairfax County, Virginia pension funds have gone in on Morgan Creek Digital’s new fund for cryptocurrency companies. The funds represent $1.2 billion in assets for the pensions of police and other public workers in the county.
$25 Million Fund Oversubscribed to $40 Million
The $40 million fund originally only sought $25 million. A small portion of its investment will be in liquid blue chip cryptos like Bitcoin and Ethereum. Investment in cryptocurrency companies will be the majority of the fund’s work, however. Coinbase and Bakkt have already been named as targets for investment.
Public pension funds affect almost 20 million Americans. Nearly 4,000 exist. If the experiment in Fairfax County goes well, and police have an even more comfortable retirement as a result, will others follow suit?
Is the herd now coming? https://t.co/n4WZG4ZQAM @business @crypto @APompliano
— Alastair Marsh (@AlastairJMarsh) February 12, 2019
Bloomberg reports that “an insurance company, a university endowment and a private foundation” is also throwing in with the fund. It has already bought equity in Bakkt, the Starbucks/NYSE crypto exchange which will likely launch America’s first Bitcoin ETF (eventually).
Everything will be tokenized in the future, Morgan Creek convinced asset managers. Whatever the crypto markets have been doing, blockchain as an industry has been attracting many of the brightest minds in Silicon Valley for years. Fairfax County’s police fund chief investment officer Katherine Molnar told Forbes:
“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity.”
Meanwhile, Pompliano told Bloomberg:
“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.”
Coinbase and Bakkt: First Choices for Morgan Creek
To safely manage the money, Morgan Creek needs to focus on companies not directly attached to the value of Bitcoin. Companies focused on the innovation of the blockchain itself, exchanges that profit whether the price is up or down, and companies looking to use the technology for public interest projects. In addition to Bakkt, the fund is making a play in Coinbase, the king of retail crypto sales.
The outspoken Bitcoin bull Pompliano might just invest the money in Bitcoin at these discount prices if it were up to him, however. He spends a great deal of time on Twitter telling people to stop waiting around.
Buy Bitcoin. https://t.co/zJjaUYgAnp
— Pomp 🌪 (@APompliano) February 11, 2019
Pompliano recently made headlines when his podcast “Off the Chain” was banned by Apple without warning. Morgan Creek Digital’s $1 million bet against the stock market as of yet has no takers, indicating that while some people speak strongly against cryptos, most people aren’t sure enough to put their money where their mouth is.