One of the recent announcement by the two public pensions in Fairfax County, Virginia, showed that institutions are not only developing an interest in cryptocurrencies and blockchain but that they are already prepared to invest in this space. The two pensions in question include Police Officer’s Retirement System and Employee’s Retirement System.
This morning our team at Morgan Creek Digital announced a new $40 million crypto venture fund anchored by two public pensions.
The institutions aren’t coming.
They’re already here. 🚀
— Pomp 🌪 (@APompliano) February 12, 2019
Now, however, Fairfax County Retirement Systems decided to speak up about the decision, stating why they chose to give cryptocurrencies a chance and bet on Bitcoin.
The amount invested in blockchain and crypto is below 1%
According to the Fairfax County Retirement Systems Director, Jeff Weller, the retirement system invested $21 million into the fund. In his recent post, Weller points out that $10 million came from the employee’s retirement system, and $11 million came from the police officer’s pension.
Since these are two separate funds, it means that the employees’ fund only dumped 0.3% of the fund, while the percentage is only slightly bigger (0.8%) when it comes to the police officer’s fund.
Furthermore, the move is not as simple as just purchasing Bitcoin. The fund, started by Morgan Creek, will use this investment to invest in blockchain companies, many of which have already joined the program. This will also not be just any company, but those with real potentials, such as Bakkt, Coinbase, and alike.
While it is true that there is risk involved, this is the type of risk that accompanies any investment, and not just those related to crypto. However, Waller also mentions that the “Fairfax’s investment team determined that the expected returns from this investment were in line with the level of risk incurred.”
The fund will invest in crypto as well
While the majority of the fund (85%) will be dedicated to investing in blockchain opportunities, Morgan Creek argued that a portion should be invested in crypto directly. However, according to Weller’s post, only around 15% of the funds will be used for that purpose.
While the crypto market remains volatile and the prices are currently low due to the bear market, an investment at the right moment could bring excellent returns, which are still in the realm of possibility, even under these conditions.
Still, Morgan Creek has not made an official investment at this time, possibly because there is a chance that Bitcoin will drop one last time before the bear market loses its energy. If it happens, BTC might fall below $3,000.
For now, the Blockchain Opportunities Fund is the first of its kind, although it is possible that it will spark a new trend of institutions investing in crypto and blockchain through other, similar funds. Especially if the current bear market ends up being followed by a rally. The only potential issue is how the sales of large amounts of Bitcoin purchased by the funds will affect the token performance once the funds are ready to cash out?
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.