Virginia Fairfax County has decided to invest some part of its pension fund in the Bitcoin (BTC) and digital currency industry, and also in the underlying technology of cryptos – blockchain. Jeff Weiler – Director of the Fairfax County Retirement Systems – released a post in response to CCN and the reports of other media outlets regarding the decision of the Country to invest in the latest offering of Morgan Creek – the Blockchain Opportunities Fund.
The fund invests in blockchain firms. It got a total of $40 million from two Fairfax County pension plans as well as other institutions.
About One Percent of Those Two Retirement Funds Are Invested in Crypto Firms
The post of the director specified the details of the amount of fund invested. According to the post, $21 million was invested in the fund by the Virginia retirement system. $10 million is from the retirement fund of the county employees, whereas $11 million is from the fund of the police officers. They represent 0.3 percent and 0.8 of the total assets of the fund respectively.
The post is aimed at assuaging any concerns that might have risen in the minds of retirees. According to CCN, the entire fund was not invested in Bitcoin (BTC) only. Rather, Morgan Creek will invest part of the fund in blockchain firms such as Bakkt and Coinbase among others.
The value of digital currency has very little impact on digital currency trading platforms. They earn commissions in whatever direction the market goes. This makes them safer investments.
Nevertheless, Weiler said: “All investments involve risk and this investment is no different. Nevertheless, as they would do with any investment, the investment team of Fairfax determined that the expected returns from this investment were in line with the level of risk incurred. This also played a big part in how much was invested.”
Morgan Creek Might Invest Up to 15 Percent in Digital Currency
Morgan Creek was able to convince the retirement overseers and others that about 15 percent of the fund should be invested directly in digital currency.
In the post, Weiler said: “No more than 15 percent of the funds will be invested in actual digital currencies and, to-date, the fund has no exposure to any digital currencies.”
The investment seems to be a risky play considering the present bear market.
However, Morgan Creek is capable of charting the stormy seas. A simple price surge to the $5k level would yield a $5M investment in Bitcoin (BTC) – a return of more than $1.9 million. Such a recovery is possible, considering the historical price trend of Bitcoin (BTC).
Bitcoin (BTC) Price Today – BTC / USD
Anthony Pompliano of Morgan Creek believes that the value of Bitcoin (BTC) could still plunge below the $3k level before the bear market runs its course, which is basically why the fund has not made any buys at the moment. Bitcoin (BTC) is viewed as the true ‘digital gold’ by many, including Barry Silbert.
Gold is one of the numerous long-term assets that pension plans seek exposure to for hedging long-term market chaos. The Blockchain Opportunities Fund is the first of its kind, but chances are it won’t be the last. It is a market of buyers in digital currencies at the moment. The next bull run could outperform the previous one, as the boom cycle in 2017 did.