Why Morgan Creek Will Not Going to Hold XRP And Stellar

In the latest interview on Thinking Crypto, the CEO of crypto hedge fund Morgan Creek Capital, Mark Yusko, gave his opinion about the present-day state of the stock markets, the global impact of COVID-19, among other relevant issues in our current global economic environment, noting that the fund is not going to hold XRP or Stellar.

Morgan Creek Will Not Hold XRP or XLM

One of the major takeaways from the interview was the motivation behind the crypto fund’s reluctance to hold XRP and Stellar (XLM) on its Digital Asset Index Fund. He detailed the main reason for this, saying that both digital assets were too closely held by Ripple and the Stellar Foundation respectively:

“We exclude anything that is too closely held. So we don’t own Stellar, we don’t own XRP.”

Just like Tesla, XRP and XLM are too closely held

He also added that his vision for the company’s Digital Asset Index Fund was to have it transform into the S&P 500 of cryptocurrencies:

“The reason we set up the digital asset index fund the way we did…we wanted it to be the S&P 500 of crypto.”

Yusko further explained that S&P 500 has a committee which selects 500 companies which go in. The next step is to exclude anything that is closely held, i.e. can be susceptible to price manipulation. He said that this may be observed in Tesla’s case, which would be on the S&P 500 by size, but it can’t be because it is too closely held, adding:

“So the same thing is true in crypto. There were two that had too much densely held tokens and so we feel like those can be…they are not as freely tradeable as Bitcoin, Ethereum, Dash and Monero.”

Morgan Creek’s decision to exclude XRP and Stellar on its Digital Asset Index Fund provides a much-needed insight into how institutional investors see the two digital assets. Such investors will avoid both since Ripple and Stellar Foundation own significant amounts of their respective cryptos. Perhaps with the additional crypto market distribution of both XRP and XLM shall crypto funds consider them as part of their portfolios.