Key Takeaways
- • Morgan Creek Capital Management founder and CEO Mark Yusko says the firm's Digital Asset Index Fund excludes XRP primarily due to concerns over how centralized the asset is, tied to Ripple's ownership structure.
- • XRP, the third-largest cryptocurrency with an $8.2 billion market cap, is omitted from a fund designed to give Morgan Creek clients exposure to the 10 largest cryptocurrencies.
- • Ripple owns more than half of the 100 billion XRP in existence, and Yusko says the firm remains concerned about potential price manipulation, although most coins are locked in escrow.
- • Yusko also confirmed the fund does not hold Stellar (XLM), the 13th-largest cryptocurrency, because the Stellar Development Foundation owns 30 billion of the 50 billion XLM in circulation.
- • Yusko said XRP could qualify for the index if its distribution became broader, indicating the exclusion is tied to distribution rather than being permanent.
Summary
Morgan Creek Capital Management founder and CEO Mark Yusko has explained why XRP is excluded from the firm's cryptocurrency index fund, according to an interview with Thinking Crypto. Yusko said the primary reason is concern over how centralized the asset is, stating that he still struggles with the XRP-Ripple structure and how cash flows are created or shared.
The Digital Asset Index Fund was created to give investors a crypto version of the S&P 500. It offers Morgan Creek clients exposure to the 10 largest cryptocurrencies, excluding XRP, which ranks as the third-largest cryptocurrency with an $8.2 billion market capitalization.
Yusko indicated the exclusion is not necessarily permanent. He said there is a point at which, if XRP had enough distribution, it could qualify for the index. Ripple owns more than half of the 100 billion XRP in existence. Although most of those coins are locked in escrow, Yusko said the firm remains concerned about potential price manipulation.
The fund also does not hold Stellar (XLM), the 13th-largest cryptocurrency. Stellar is an open-source payments platform for digital currencies, co-founded by Jeb McCaleb, a former co-founder and chief technology officer of Ripple. The Stellar Development Foundation owns 30 billion of the 50 billion XLM in existence. Yusko said the firm excludes assets that are too closely held, stating, "So we don't own Stellar and we don't own XRP."
The Digital Asset Index Fund was created to give investors a crypto version of the S&P 500. It offers Morgan Creek clients exposure to the 10 largest cryptocurrencies, excluding XRP, which ranks as the third-largest cryptocurrency with an $8.2 billion market capitalization.
Yusko indicated the exclusion is not necessarily permanent. He said there is a point at which, if XRP had enough distribution, it could qualify for the index. Ripple owns more than half of the 100 billion XRP in existence. Although most of those coins are locked in escrow, Yusko said the firm remains concerned about potential price manipulation.
The fund also does not hold Stellar (XLM), the 13th-largest cryptocurrency. Stellar is an open-source payments platform for digital currencies, co-founded by Jeb McCaleb, a former co-founder and chief technology officer of Ripple. The Stellar Development Foundation owns 30 billion of the 50 billion XLM in existence. Yusko said the firm excludes assets that are too closely held, stating, "So we don't own Stellar and we don't own XRP."
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