25.10.2020

Why One Crypto Hedge Fund Won’t Hold XRP and Stellar (XLM)

In a recent interview on Thinking Crypto, the CEO of Morgan Creek Capital, Mark Yusko, talked about the current state of the stock markets, the global impact of COVID19, amongst other relevant topics in our current global economic environment.

Quick take:

  • CEO of Morgan Creek Digital, Mark Yusko, was a recent guest on Thinking Crypto, a Youtube crypto news channel.
  • In the interview, Mr. Yusko discussed the current state of the stock market, COVID19, the genesis of Morgan Creek Capital, CBDCs and more. 
  • He further explained that XRP and XLM were too closely held by Ripple and the Stellar foundation respectively. 
Why Morgan Creek Won’t Hold XRP or XLM

One key takeaway from the interview was why the crypto fund did not have XRP and Stellar (XLM) on its Digital Asset Index Fund. He explained the reason for this was that both digital assets were too closely held by Ripple and the Stellar foundation respectively.

We exclude anything that is too closely held. So we don’t own Stellar, we don’t own XRP.

XRP & XLM, Just Like Tesla, are Too Closely Held

He also added that his vision for the firm’s Digital Asset Index Fund was to have it evolve into the S&P 500 of cryptocurrencies.

The reason we set up the digital asset index fund the way we did…we wanted it to be the S&P 500 of crypto.

And what does the S&P 500 do?

It has a committee that decides which 500 companies go in. And then they exclude anything that is closely held…that can be manipulated by price. And so Tesla for example, by size, would be on the S&P but it can’t be because it is too closely held.

So the same thing is true in crypto. There were two that had too much densely held tokens and so we feel like those can be…they are not as freely tradeable as Bitcoin, Ethereum, Dash and Monero.

Conclusion

Morgan Creek’s decision to exclude XRP and Stellar (XLM) on its Digital Asset Index Fund has provided much-needed insight into how institutional investors view the two digital assets. Such investors will avoid both cryptos because Ripple and the Stellar Foundation own considerable amounts of XRP and XLM. Perhaps with the additional crypto market distribution of both XRP and XLM, shall such crypto funds consider them as part of their portfolios.

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Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

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