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Morgan Creek makes a $ 1 million bet, inviting investors who believe that the cryptography market will not outperform the S & P 500 to put their money where their mouth is, according to a report by the CNBC.
Morgan Creek manages an indexed fund called the Digital Asset Index Fund, in collaboration with Bitwise Asset Management. Indexed funds offer investors high net worth exposure to major cryptocurrencies for market value.
The cryptocurrency investment firm calls the Buffett Bet 2.0 challenge, imitating the 2007 Warren Buffet decision to bet $ 1 million that the S & P 500 would do better than a group of hedge funds against the asset manager Protégé Partners . Buffet ended up winning the bet before donating his earnings to charity. Likewise, Morgan Creek calls every investor who believes that the S & P 500 would yield more returns than Morgan Creek's cryptic investments for a period of 10 years.
Co-founder and partner of Morgan Creek, Anthony Pompliano, said that anyone on the other side of the bet must be someone bullish on the bottom of the index or someone who believes that the criptos are overvalued.
"This is a combination of our perspectives not only for the positive side of cryptocurrencies, but also for the prospects for public stocks", explained Pompliano at CNBC.
Pompliano took a stab at public stocks, highlighting the recent losses in Diamondback Energy based in Texas, and other favorites from investors like Facebook, which is experiencing a loss of 24% year on year.
"A lot of people might look at this and think we are confident about crypts – but we need to look at what resources we are going against." Public stocks are not exactly at historical highs, "said Pompliano.
While Pompliano and his Morgan Creek partners are funding their bet with personal funds and not with money from the business, the partners still have to find someone to take the other side of the bet.
Last month, Pompliano told CNBC's SBC that according to him the price of Bitcoin would have stabilized with a reduction of 85% before the price rose to its all-time high. While investor confidence has been emptied from the market, Pompliano sees the recent collapse as a correction expected for a market that was overvalued in December last year.
"Bitcoin was overvalued in December & # 17.There are more sellers than buyers this year.Therefore the price goes down.But there are three things you need to remember.The first is, this is a transactional transaction level It is the safest in the world, it has to be worth something, it can not be zero, the second is that it is the best asset class of the last ten years, it has outperformed S & P, Dow, Nasdaq, etc., during the longer bull run . "
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