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Bitcoin Fund Bets $1M That Crypto Will Outperform S&P 500

Morgan Creek Bullish On Crypto, Issues $1M “Buffett Bet 2.0”

Morgan Creek Capital, a juggernaut in investment management, recently saw its crypto-centric subsidiary make an extremely bullish bet on Bitcoin (BTC) and its altcoin brethren. More specifically, according to a report from CNBC, Morgan Creek Digital, headed by Anthony “Pomp” Pompliano, has called for a single investor to take on a hefty bet.

The wager, which has been colloquially dubbed “Buffet Bet 2.0,” sees Morgan Creek tout that its in-house cryptocurrency index fund, which includes all prominent crypto assets, save for Stellar Lumens (XLM) and XRP, will outperform the Standard & Poors’ 500 over the next 10-years.

If the crypto-centric index outperforms the S&P 500, Morgan Creek’s crypto branch expects a $1 million cheque to fly its way. On the other hand, if the equities market undergoes a monumental run, the American investment consortium will fork out $1 million to its opponent. This “Buffet Bet 2.0,” for those who are unaware, is an evident reference to Warren Buffet’s infamous ante, in which the multi-billionaire claimed that a group of hedge funds would outdo the S&P.

Speaking about the importance of this wager, which is more serious than it may initially seem, Pompliano, co-founder of the crypto group, stated:

This [bet] is a combination of our outlook not only for the upside of cryptocurrencies but also the outlook on public equities.

Pomp, known for his anti-bank, pro-crypto rhetoric he incessantly posts on Twitter, then added that while the bet may indicate that Morgan Creek is “just bullish on crypto,” it’s important to put everything, including traditional markets, into perspective. “But you need to look at what asset we’re going up against, the crypto advocate mused, before adding, “public equities aren’t exactly at their all-time highs either.”

More specifically, the former Snapchat and Facebook employee drew attention to the faltering tech industry, specifically targeting the losses sustained by the companies in FANG, which have lost all of 2018’s gains in a matter of weeks.

Morgan Creek’s Pompliano And Yusko Laud Bitcoin

In a testament to Morgan Creek’s love for cryptocurrencies, the $1 million that is being put up for gamble has come from the pockets of the firm’s partners, instead of the in-house fund. Moreover, the unspoken terms of the wager stipulate that the winner will donate winnings to charity, making it clear that Morgan Creek truly believes in crypto assets for their fundamentals, rather than their ability to gain value over the long haul.

This recent development, which comes amid a dismal BTC downturn, comes just weeks after Pompliano and Mark Yusko, the latter being Morgan Creek’s founder, both took to distinct CNBC segments to laud Bitcoin and other cryptocurrencies.

As reported by Ethereum World News previously, Yusko, a prominent American investor, explained to CNBC’s Fast Money that he loves Bitcoin for the long-term, adding that the recent sell-off was catalyzed by artificial selling pressure originating from CBOE and CME’s BTC vehicle. Keeping this in mind, the Morgan Creek founder added that now could be an optimal time for investors to purchase cryptocurrencies.

Not only does he expect for BTC to revisit its all-time highs, but Yusko added that cryptocurrencies, with its asymmetric risk profile, could see a 20x+ rally over the next decade.

Pompliano, an overt cryptocurrency proponent, industry bastion, and colleague of Yusko, also took to Bitcoin’s side on the CNBC Squawk Box panel. Pomp noted that at its core, Bitcoin is the world’s most secure transaction settlement layer, so value in BTC will always exist.

Title Image Courtesy of Jason Briscoe on Unsplash

The post Bitcoin Fund Bets $1M That Crypto Will Outperform S&P 500 appeared first on Ethereum World News.

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Bitcoin Fund Bets $1M That Crypto Will Outperform S&P 500

Morgan Creek Bullish On Crypto, Issues $1M “Buffett Bet 2.0”

Morgan Creek Capital, a juggernaut in investment management, recently saw its crypto-centric subsidiary make an extremely bullish bet on Bitcoin (BTC) and its altcoin brethren. More specifically, according to a report from CNBC, Morgan Creek Digital, headed by Anthony “Pomp” Pompliano, has called for a single investor to take on a hefty bet.

The wager, which has been colloquially dubbed “Buffet Bet 2.0,” sees Morgan Creek tout that its in-house cryptocurrency index fund, which includes all prominent crypto assets, save for Stellar Lumens (XLM) and XRP, will outperform the Standard & Poors’ 500 over the next 10-years.

If the crypto-centric index outperforms the S&P 500, Morgan Creek’s crypto branch expects a $1 million cheque to fly its way. On the other hand, if the equities market undergoes a monumental run, the American investment consortium will fork out $1 million to its opponent. This “Buffet Bet 2.0,” for those who are unaware, is an evident reference to Warren Buffet’s infamous ante, in which the multi-billionaire claimed that a group of hedge funds would outdo the S&P.

Speaking about the importance of this wager, which is more serious than it may initially seem, Pompliano, co-founder of the crypto group, stated:

This [bet] is a combination of our outlook not only for the upside of cryptocurrencies but also the outlook on public equities.

Pomp, known for his anti-bank, pro-crypto rhetoric he incessantly posts on Twitter, then added that while the bet may indicate that Morgan Creek is “just bullish on crypto,” it’s important to put everything, including traditional markets, into perspective. “But you need to look at what asset we’re going up against, the crypto advocate mused, before adding, “public equities aren’t exactly at their all-time highs either.”

More specifically, the former Snapchat and Facebook employee drew attention to the faltering tech industry, specifically targeting the losses sustained by the companies in FANG, which have lost all of 2018’s gains in a matter of weeks.

Morgan Creek’s Pompliano And Yusko Laud Bitcoin

In a testament to Morgan Creek’s love for cryptocurrencies, the $1 million that is being put up for gamble has come from the pockets of the firm’s partners, instead of the in-house fund. Moreover, the unspoken terms of the wager stipulate that the winner will donate winnings to charity, making it clear that Morgan Creek truly believes in crypto assets for their fundamentals, rather than their ability to gain value over the long haul.

This recent development, which comes amid a dismal BTC downturn, comes just weeks after Pompliano and Mark Yusko, the latter being Morgan Creek’s founder, both took to distinct CNBC segments to laud Bitcoin and other cryptocurrencies.

As reported by Ethereum World News previously, Yusko, a prominent American investor, explained to CNBC’s Fast Money that he loves Bitcoin for the long-term, adding that the recent sell-off was catalyzed by artificial selling pressure originating from CBOE and CME’s BTC vehicle. Keeping this in mind, the Morgan Creek founder added that now could be an optimal time for investors to purchase cryptocurrencies.

Not only does he expect for BTC to revisit its all-time highs, but Yusko added that cryptocurrencies, with its asymmetric risk profile, could see a 20x+ rally over the next decade.

Pompliano, an overt cryptocurrency proponent, industry bastion, and colleague of Yusko, also took to Bitcoin’s side on the CNBC Squawk Box panel. Pomp noted that at its core, Bitcoin is the world’s most secure transaction settlement layer, so value in BTC will always exist.

Title Image Courtesy of Jason Briscoe on Unsplash
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Morgan Creek CEO: 20x Bitcoin (BTC) Bull Run Possible Over Next Decade

Mark Yusko: “Bitcoin — I Love It Long-Term”

Early last week, CNBC’s “Fast Money,” somewhat infamous for its coverage of markets, continued its incessant coverage of Bitcoin (BTC), calling upon Mark Yusko of Morgan Creek Capital Management to make a guest appearance. Surprisingly, while Yusko hails from the realm of traditional finance, he expressed that cryptocurrencies are likely to succeed over the long haul.

Opening his comments on the matter, which came after he painted a dreary picture for equity markets, Yusko was straight and to the point, telling viewers that he “loves Bitcoin for the long-term.”

Touching on the arrival of CBOE’s and CME’s BTC futures vehicles, Yusko noted that he totally missed the mark on how these aforementioned contracts would affect this nascent market. He explained that artificial selling pressure (rehypothecation) has been directly placed on BTC, in spite of the fact that said futures aren’t physically-backed. This, of course, was likely said to attribute BTC’s most recent sell-off, which forced the digital asset under $4,000, to a (group of) catalyst(s).

However, he explained that rehypothecation will be phased out of cryptocurrency markets in the future, pending on the adoption of BTC as a viable store of value, which may subsequently catalyze a leg higher. Yusko, further explaining his long-term penchant for Bitcoin, went on to add that $4.6 billion/day in trading volumes is a far cry from the sub-few-hundred million/day seen in the years prior, only accentuating that this industry is flourishing.

‘Buying Today Isn’t A Bad Idea’

Discussing BTC’s most recent decline and a potential bottom, Yusko, the Morgan Creek chief explained that investors “don’t need a very long time horizon at all” to make a nice return on a BTC investment.

This sentiment, which was short, but sweet, has seemingly echoed claims made by other industry insiders on their short-term view on BTC, specifically from an investment perspective.

BlockTower partner Michael Bucella, formerly of Goldman Sachs Canada, recently told the exact same CNBC segment that while he expects for BTC to fall “one leg lower” before bottoming, he expects a subsequent sharp rebound to the upside, which may put short-term speculators well into the green.

20x Upside In BTC Possible Over Next Decade

Returning to his discussion about Bitcoin’s performance over the long haul, Yusko noted that over the next decade, he truly believes that BTC could see a 20x+ upside, adding that crypto, with its asymmetric risk profile, is a rare asset class that can support such a rally.

He explained that when it comes down to the nitty-gritty, Bitcoin is a network, not a currency or company, before adding that the world’s largest corporations are based on networks, not specific products. So, keeping this in mind, he exclaimed:

Networks don’t grow based on economic growth, interest rates, or profits. [Instead,] that grow on technology changes, regulatory changes — we just saw [the SEC’s] Jay Clayton here talking over at Consensus: Invest about how if you break the securities laws, we’re going to punish you. [But] if you don’t, you play in a place like Bitcoin, which we deem a currency. So I think that this [premise] is fantastic.

Yusko’s Colleague, Anthony Pompliano, Also Lauds Crypto, Bitcoin

Yusko’s appearance on Fast Money’s panel comes amid a newfound drive from Morgan Creek, along with other well-known industry savants and startups, to push for positive mainstream coverage of this decade-old, yet ground-breaking innovation.

As reported by Ethereum World News previously, Anthony “Pomp” Pompliano, an overt cryptocurrency advocate, industry bastion and colleague of Yusko, took to Bitcoin’s defense on the CNBC Squawk Box panel, anchored by one seemingly skeptical of cryptocurrencies and their potential.

The former Snapchat and Facebook employee exclaimed that at its core, Bitcoin is the world’s most secure transaction settlement layer, so value in BTC will always exist. He added that cryptocurrencies as a whole are the best performing asset class in the past decade, even ousting the U.S. equities market, which has been on its longest and most notable bull run in decades.

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BTC Price Aside, Bitcoin Fundamentals Booming Beyond Compare

“Don’t Let The [Bitcoin] Price Distract You”

Ardent Bitcoin advocate Anthony Pompliano, better known as “Pomp” in the cryptosphere, recently took to his well-followed Twitter soapbox to tout the fact that in spite of BTC’s price decline, the fundamentals of the network backing the asset are undoubtedly booming.

Citing a recent installment of Off The Chain, a well-respected, crypto-centric newsletter headed by Pomp, the former Facebook and Snapchat employee simply put that “Bitcoin has become stronger,” while BTC itself has fallen from an all-time high at $20,000 to $4,100 today (80% decline).

Pomp added that even while mainstream media outlets have prematurely proclaimed that “cryptocurrency is dead!” and/or a Ponzi scheme, these cries for a Bitcoin death throe are nothing more than a surface level observation, rather than logical analysis. As put by the Morgan Creek Digital partner, well-known in the cryptosphere for his anti-bank, pro-crypto rhetoric:

Fortunately, nothing could be further from the truth. The fundamental drivers of the decentralized technology network are actually growing.

Bitcoin Tx Fees Fall, As Transaction Count Booms

Compiling and aggregating a list of “key data points,” the industry insider drew attention to pertinent indicators that signal that the underlying fabric of Bitcoin is swelling, rather than shrinking in correlation with prices.

The number of users on Blockchain.com, for one, has exploded from 10 million in late-2016 to 32 million today, a staggering growth rate, even for the most innovative industries. And as the number of wallets has swelled, so has the total Bitcoin transaction count, growing by 33% in the past year alone. This, of course, can be attributed to the adoption of the asset for payment and speculative purposes, along with the rise in popularity of Segwit, which facilitates higher tx/s limits.

Pomp also drew attention to the rapidly growing “number of transactions excluding popular addresses (exchanges mostly),” indicating that Bitcoin has found itself used actively in innovative systems or via payment networks.

And contrary to popular belief, through all this adoption, the average BTC transaction fee has continued to fall, with BitInfo indicating this statistic has fallen from $52 in late-December 2017 to just $0.6 today. As noted in a recent Ethereum World News report, a ‘whale’ recently sent over $600 million for $7 in fees (he/she/they overpaid).

In reality, however, the already cheap fees are actually a lot smaller, with blockchain.com currently citing a $0.06 fee for transactions through its service, a fee that is near-negligible except in microtransactions.

Mining, Node Ecosystem Remains Strong

Despite the recent hashrate decline seen on the Bitcoin Network, from a long-term perspective, everything is all fine and dandy, pointing out that hashrate has quadrupled in the past year alone. Moreover, from a logarithmic chart view, the recent decline is just a drop in the bucket.

Closing off his analysis, drawing attention to a lesser-known indicator, Pomp brought up the number of active Bitcoin nodes, pointing out that this figure has risen by 98% in the past two years to 10,510.

And keeping all this in mind, Pomp explained that this innovation isn’t going anywhere, adding that traders shouldn’t be distracted by the noise (price), instead focusing on the fundamentals. In short, as Pomp noted:

While it (BTC price) is important, it is not an important measurement of future value. The underlying fundamentals for the blockchain appear to be growing stronger despite the decline in the current price… Bitcoin isn’t going anywhere.

Pomp Lauds Crypto On CNBC

This most recent advocacy for this nascent industry comes just days after Pomp took to CNBC’s Squawk Box, a much-watched financial markets segment, to bash critics of Bitcoin.

The Morgan Creek representative exclaimed that at its core, Bitcoin is the world’s most secure transaction settlement layer, so value in BTC will always exist. He added that cryptocurrencies as a whole are the best performing asset class in the past decade, even ousting the U.S. equities market, which has been on its longest and most notable bull run in decades.

Title Image Courtesy of Marco Verch Via Flickr

The post BTC Price Aside, Bitcoin Fundamentals Booming Beyond Compare appeared first on Ethereum World News.

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Ripple’s XRP Conspicuously Missing from Morgan Creek Cryptocurrency Index Fund

XRP is among a few notable cryptocurrencies snubbed by the recently launched Morgan Creek Digital Asset Index Fund. Despite being a prominent cryptocurrency Ripple’s XRP is no stranger to being overlooked by institutional investment vehicles due to the uncertainty concerning whether it is a security token.

XRP and XLM Not Included in the Fund

XRP and XLM (Stellar Lumens) were completely missing from the list of cryptocurrency tokens that will be managed by the index fund launched on Tuesday (August 28, 2018). Both cryptocurrencies share a lot in common, particularly the fact that they are both premined. Premining refers to a situation where the total token supply of a cryptocurrency is produced at the onset of the blockchain.

Commenting on the exclusion of premined cryptocurrencies like XRP and XLM, Anthony Pompliano, a partner at the firm said:

If there’s a central party that owns 30% or more of supply, then we withhold those from the index. Because we think that introduces a lot of additional risks that may not be there if it was a more decentralized network.

There continues to be a fair bit of controversy regarding whether XRP constitutes a security due to its apparent centralized nature. However, Ripple executives counter this claim by stating that their majority ownership of XRP tokens doesn’t make the cryptocurrency to be decentralized.

While the uncertainty remains, Morgan Creek joins a list of major institutional focused cryptocurrency investment vehicles in the United States that have steered clear of the XRP token.

Details of the Cryptocurrency Index Fund

Writing for Forbes, Michael del Castillo highlighted some of the features of the Morgan Creek Digital Index Fund. The fund is backed by the Morgan Creek institutional investment enterprise that currently boasts $1.5 billion worth of assets under management (AUM).

According to the details released thus far, the fund provides institutional investors access to Bitcoin, Ethereum, and eight other top cryptocurrency tokens. It is a rules-based index fund under the management of Bitwise Asset Management which signed a partnership agreement with Morgan Creek earlier in the year. Commenting on the progress made thus far, Pompliano said:

We’re fully prepared and feel we’ve built something that institutional investors will find attractive regardless of how the assets are categorized. Whether they’re securities or not.

Do you think Morgan Creek was right to snub premined cryptocurrencies like XRP and XLM? Where do you stand on the debate whether XRP is a security? Let us know your thoughts in the comment section below.

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Prominent Investor: This Bitcoin Bear Season May Last For A While

Although the market has begun to recover, albeit ever so slightly, there are some industry leaders that aren’t convinced that Bitcoin is back in bull mode just yet.

“Bitcoin Will Bottom, Then Go Sideways”

Anthony Pompliano, the founder of the crypto/blockchain-centric Morgan Creek Digital Assets, recently appeared on Ran Neuner’s “Crypto Trader” show to express his bearish outlook on this fledgling market.

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Pompliano, who goes by “Pomp” in many circles, opened up his segment discussing the fact that the bear market, which began near the start of 2018, may be far from over.

Responding to Neuner’s query regarding the bear market, Pomp stated:

I think if you look across the historical context with these parabolic runs — we’ve seen the drawdown of about 70% or so, we’ve seen a couple in the past that have been worse that have been right into the 80-85%. But I think what ends up happening is when you get a long drawdown that we have just seen, we will hit a bottom at some point and then go sideways for a while.

Later elaborating on his timeline prediction for this prediction, the Morgan Creek executive brought attention to the approximately 400-day correction that Bitcoin underwent following the Mt.Gox hack. Somewhat likening this correction to the aforementioned, Pomp added that 2018’s correction could be “quite long.” While he did not give any solid numbers in this statement, it is implied that he expects for this drawdown, pullback, or whatever you want to call it to last for a few more months at the very least.

He went on to add that the value of Bitcoin, along with other crypto assets, have not put in a bottom as of yet, but added that it is “hard to tell” exactly where price levels will head. But citing data compiled and analyzed by Morgan Creek, Pompliano noted that Bitcoin could bottom out anywhere within the $3,000 to $4,000 range.

To further back this prediction, the Morgan Creek executive noted that his firm is ready to allocate fiat to the market at those levels, alluding to the fact that a $3,000 to $4,000 Bitcoin would be a good zone of accumulation.

This forecast mirrors what Pomp pointed out in a recent Morgan Creek Digital Assets letter, relayed by CCN, in which he wrote that Bitcoin could fall as low as $3,000 in the upcoming months.

An Influx of Capital Catalyzed Last Year’s Bull Run

CNBC host Neuner went on to question Pomp about last year’s bull run, asking the investor about the catalysts behind Bitcoin’s historical run from $1,000 to near-$20,000 within a year. The Morgan Creek founder first brought up the idea of governmental restrictions, noting that if a ban is placed on a specific asset, asset class or industry, that it will counterintuitively see an influx of buying pressure, rather than selling pressure.

This was evidently seen in crypto with the Chinese government, who banned the purchase, sale, and trade of cryptocurrencies and ICOs multiple times in mid to late-2017. Secondly, Pomp noted that last year’s influx of capital, from retail and institutional investors alike, can be also attributed to last year’s astounding bull run. He added that enough money came in to lay the “groundwork and infrastructure for the next five to ten years.” Even today, there is still capital inflow, even in the face of a bear market, which he sees as a “positive sign for the future.”

Last but not least, he drew attention to the network effects of these public blockchains. For those who are unaware, a network effect is a correlation between the number of individuals using a network and the value of such a network. As Bitcoin surged last year, the number of active wallets and individuals using the blockchain surged, making BTC inherently more valuable

Although Anthony Pompliano’s outlook may seem bearish on crypto in the short to mid term, it is clear that he is ready to pack it in for the long haul.

Photo by Janko Ferlič on Unsplash
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Bitcoin Can Reach $50,000 in 2018 Based on Three Factors, Says Investment Manager

Just like Bitmex CEO, Arthur Hayes, Anthony Pampliano is sticking to his $50,000 Bitcoin price forecast for 2018. Pompliano, a partner at Morgan Creek Digital Assets, believes that the top-ranked cryptocurrency has an exciting last half of the year in store for all stakeholders. Presently, BTC is trading slightly below the $8,000 after a slight pullback caused by the SEC rejection of the Winklevoss BTC ETF application.

Human Psychology and Bitcoin Price

In a Skype conversation with Cheddar, Pompliano said:

I’ve got a high degree of confidence that at some point in the future it’s going to hit $50,000. And I’ve got some degree of confidence that it will be by the end of this year.

According to Pompliano, three crucial factors will drive the price of BTC to the $50,000 milestone. These factors are – human psychology, Bitcoin ETF speculation, and an influx of big-money investors.

Pompliano explained that from a psychological perspective, BTC traders prefer round figures. Thus, within any thousand-dollar price range, there was always the tendency to push the value above the next milestone. During BTC’s recent push above $8,000, it broke through three consecutive resistance levels without becoming overbought.

Since the end of June 2018, the market has become awash with positive sentiments which have coincided with fortuitous circumstances such as the trade standoff between China and the United States. At the center of the rumors and speculations in anticipation of an SEC-approved Bitcoin ETF.

On Thursday (July 25, 2018), the SEC rejected the Winklevoss BTC ETF filing. In his analysis before the SEC’s decision, Pompliano revealed that an SEC-approved Bitcoin ETF in 2018 was unlikely. However, speculation about a future approval was enough to sustain the positive sentiment on that count.

Institutional Investors

Finally, Pompliano mentioned the influx of institutional money into the market. As a partner at Morgan Creek Digital Assets, he has a front row seat to the activities of big-money investors in the space. According to Pompliano, cryptocurrencies aren’t alluring only to retail investors but to hedge funds as well, who are looking for the opportunity to make huge profits in a short amount of time.

Many experts agree on the fact that institutional investors will cause a significant price surge in the market. However, big-money players haven’t fully committed to the market due to some nagging problems concerning custody and regulations.

Do you agree with Anthony Pompliano’s analysis? What is your end of year Bitcoin price forecast? Keep the conversation going in the comment section below.

Image courtesy of Coinmarketcap.

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