The new risk managed Bitcoin fund was filed with the SEC on Thursday.
Morgan Creek and Exos filed a new Bitcoin (BTC) fund with the U.S. Securities and Exchange Commission, or SEC, on Thursday. If approved, the fund will offer institutional investors another way to long the flagship cryptocurrency without the volatility of owning it outright.
Kevin Rooke reported Friday that the Morgan Creek-Exos Risk Management Bitcoin Fund has been filed with U.S. regulators. The fund intends to provide direct exposure to Bitcoin with inbuilt mechanisms to reduce allocation when quantitative signals turn negative.
As Rooke reports, the fund “handles technical details around trade, transfer, and custody of Bitcoin.”
In its initial marketing materials, Exos says there's a need to smooth out market volatility for institutional investors who are unaccustomed to Bitcoin's turbulence and highly technical properties.
According to Exos:
“The Fund will fully allocate capital to bitcoin when its indicators are positive and reduce or exit its position when its indicators turn negative.”
Founded by Mark Yusko, Morgan Creek Capital Management provides alternative investment products to institutional investors. The firm operates a digital asset division that specializes in blockchain technology and Bitcoin investments.
As a business-to-business market platform, Exos Financial is involved in securities, commercial finance and asset management services.
Institutional onramps into Bitcoin and other cryptocurrencies have ushered a new wave of adoption in 2020. Crypto funds, derivatives and exchange-traded products have spurred a new parabolic trend in Bitcoin’s price.
Growing mainstream adoption has been aided by massively bullish calls from legendary investors such as Paul Tudor Jones and Stanley Druckenmiller, both of whom own Bitcoin.
Beyond investor adoption, corporations have also laid stake in Bitcoin this year. It’s estimated that corporate treasuries hold roughly 842,229 BTC, which is equivalent to $15.7 billion in today’s value.