Ripple’s XRP and Stellar Lumens [XLM] have failed to make the cut for the Morgan Creek Digital’s new digital asset fund. Concerns regarding the level of centralization in Ripple’s XRP and Stellar Lumens [XLM] have cost them a place in the fund.
Morgan Creek Digital, a digital asset management firm, on Tuesday launched its Digital Asset Index Fund which will give endowments, foundations, pensions, wealthy families and sovereign wealth funds exposure to some of the largest cryptocurrencies in the world.
The fund was launched in partnership with Bitwise Asset Management, who will serve as the fund manager. The fund will operate be overseen by an index committee including Yusko, Anthony Pompliano – partner at Morgan Creek Digital, and Bitwise Global Head of Research Matt Hougan.
“Every investor should be considering an allocation to digital assets right now. Increasingly, institutional investors are coming to us asking for exposure to the space,” said Mark Yusko, CIO at Morgan Creek, in a statement.
All the assets in the fund are kept in 100 percent cold storage and will be audited annually. To invest in the fund, a minimum of $50,000 is required and is only available to accredited investors in the U.S.
“Institutional investors are seeing the market pullback as an opportunity start building exposure to the space, and have been pushing us to get this fund to market quickly,” said Pompliano.
The digital coins that were listed include Bitcoin [BTC], Ethereum [ETH], Bitcoin Cash [BCH] and EOS [EOS], among others.
Pre-mined coins excluded from fund
Notably though, Ripple’s XRP and Stellar Lumens [XLM] did not make it to the list.
In order to be included in the fund, virtual currencies should have certain requirements, including custody qualifications, trade concentration limits and pre-mine restrictions.
Both Ripple’s XRP and Stellar Lumens [XLM] are pre-mined coins, meaning the coins, or at least a part of the total coins, had already been mined before being circulated.
“If there’s a central party that owns 30 percent or more of supply then we withhold those from the index,” Pompliano told magazine Forbes. “Because we think that introduces a lot of additional risk that may not be there if it was a more decentralized network.”
Ripple Labs, the software firm behind XRP, had earlier disclosed that it owned 60 billion XRP while about 55 billion XRP are locked up in escrow. Some skeptics claim XRP exists only to fund the firm and inflate its valuation.
Meanwhile, only 18 percent of the total supply of Stellar Lumens [XLM] is circulated to the public, data from CoinMarketCap showed. The remaining is held by the Stellar Development Fund.
Image via Shutterstock
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