Morgan Creek just made the news because it put up a huge $1 million wager on the table. Investors that think crypto markets are not going to outperform S&P 500 are invited to bet against this. Morgan Creek claims that the crypto market is going to outperform the stock market this very decade.
Morgan Creek is currently operating the Digital Asset Index Fund through a Bitwise Asset Management partnership. Through the index, the high net-worth investors are exposed to the main cryptocurrencies.
The investment firm practically mimics the 2007 Warren Buffet bet of $1 million that S&P 500 would do better than some hedge funds groups. Buffet did win that bet and earnings were donated to charity. In a similar fashion, Morgan Creek calls the investors that think S&P 500 will produce better returns than the crypto investments made by them over 10 years.
Anthony Pompliano, Morgan Creek partner and co-founder, declared:
This is a combination of our outlook not only for the upside of cryptocurrencies but also the outlook on public equities. A lot of people might look at this and just think we’re bullish on crypto – but you need to look at what asset we’re going up against. Public equities aren’t exactly at their all-time highs either.
What is interesting is that the bet is actually funded by personal funds put up by Pompliano and partners. As expected, there is still nobody that was willing to take the bet.
It was reported last month that Pompliano believes cryptocurrencies are going to go down by around 85% and then see a price surge leading to all-time high values. Investor confidence is definitely at a low but Pompliano declared that the current market crash is just a correction that was completely expected. His exact words were:
Bitcoin was overvalued in December 2017. There are more sellers than buyers this year. So the price goes down. But there are three things you got to remember. The first is, this is a transaction settlement layer. It’s the most secure in the world. It’s got to be worth something. It can’t be worth zero. The second is it’s the best performing asset class in the last ten years. It’s outperformed S&P, Dow, Nasdaq, et cetera, during the longest bull run.
Pompliano definitely thinks that cryptocurrencies are going to be big in the near future. However, since the bet is put on a ten year period, it is clear that the real expectations are for long-term profit. Nobody really knows when the market is going to recover but more and more people every month appear saying that cryptocurrencies are going to outperform other investment options in the future.