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Osato Avan-Nomayo@3rdPesinSingulaFeb 12, 201909:00

Osato Avan-Nomayo@3rdPesinSingulaFeb 12, 201909:00

A brace of public pension funds is backing a $40 million venture-capital fund established by Morgan Creek Digital which focuses on cryptocurrency investments. This development marks the first ever involvement of U.S. pension funds in the virtual currency investment space.

Morgan Creek Digital announced on Tuesday (February 12, 2019) the launch of a $40 million cryptocurrency venture fund anchored by two public pension funds.

According to the announcement, the Fairfax County Employees and Fairfax County Police Pension Plans are the two largest investors in the fund.

Both pensions manage an asset portfolio worth about $1.2 billion. They are also the first ever public retirement fund to invest in cryptocurrencies, a notable milestone for the burgeoning industry.

Speaking toBloomberg, Morgan Creek Digital founder, Anthony Pomplianorevealedthat the fund would invest in blockchain startups and cryptocurrencies. Already, the new fund hasinvestmentsin notable companies likeBakktand Coinbase.

Currently, there is no public disclosure of the investment terms, but Pompliano did indicate that the fund is a special purpose vehicle (SPV). Also, reports suggest that apart from equity investments in crypto-based companies, the fund will retain a portion of its value in cryptocurrencies like bitcoin00.

Many crypto critics usually never fail to bring up the absence of public pension funds in the virtual currency investment arena. Back in January, JPMorgan analystsrepeatedthe same rhetoric as part of their Bitcoin is only valuable in a dystopia narrative.

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

Pomp ? (@APompliano)February 12, 2019

The significance of these two public pension funds taking the plunge can potentially hold profound ramifications for the industry as a whole. Usually, critics attribute the reticence of pension funds in investing in cryptocurrency to issues related to manipulation, volatility, lack of security, among others.

In late 2018, the Morgan Creek Digital partner called on public pension funds topivottowards the cryptocurrency and blockchain technology market. According to Pompliano, cryptos could serve as a viable hedge for such funds against what he called an impending US pension crisis.

For Pompliano, the news is a massive win for cryptocurrency, saying the institutions arent coming. Theyre already here.

During the interview withBloomberg, the Morgan Creek Digital founder also said:

Theres 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 theyre betting on innovation as a great way to deliver risk-mitigated returns.

Do you think this development will vastly enhance the pedigree of cryptocurrencies in the eyes of other reticent mainstream investors? Let us know your thoughts in the comments below.

Image courtesy of Twitter (@APompliano), Shutterstock

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