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Bitcoin is ‘Schmuck Insurance’: Morgan Creek Capital Founder

Bank of America Merrill Lynch recently surveyed fund managers and found that investors are the most bullish they’ve been on bonds since the end of 2008.  But that popularity comes as long-term risks are developing for traditional asset classes. For these reasons, Morgan Creek Capital Founder & CIO, Mark Yusko thinks new types of protective ‘insurance’ such as Bitcoin may be warranted. Investor Perceptions vs. Market Reality While the traditional expectations call for a slow summer trading period, stocks have consistently traded under heavy selling pressure and posted some of their most volatile single-session performances of 2019.  Bearish catalysts first appeared in the U.S. bond space, where the yield curve inverted for the first time since the 2008 financial crisis.   As a result, bond markets now meet three of the four main characteristics which define a ‘bubble’ environment for global government debt.  But despite this clear evidence of macro uncertainty, government bonds haven’t been this popular in more than a decade.   Evidence of Global Deterioration Mark Yusko, Founder, and CEO of Morgan Creek Capital Management responded to these developments in a recent interview with CNBC: I think we’ve got the biggest bond bubble we’ve ever seen in history… and it’s starting to show signs of deterioration. Unfortunately, these signs have become visible in most regions around the world.  Let’s take a look at the activity in bond markets for developed countries in several regions.  We should start with the world’s largest economy, where the U.S. Treasury market’s 30-year bond yield has an all-time low clearly in its sights: Source: Bloomberg Next, we can look at government bond yields from Sweden and Switzerland (two of Europe’s strongest and most stable economies) dating all the way back to 1870: Source: Longview Economics, Macrobond Last, we will look at perpetual bonds in the U.K. (also referred to as consols) dating back to 1700.  Essentially, these yields are tied to bonds that the government can redeem any time they want (without much advance warning): Source: Longview Economics, Macrobond Needless to say, these are all very long-term comparisons.  Essentially, these broader time frames make it much more difficult skeptics to dismiss the current trends as simple one-off events. Bitcoin As ‘Schmuck Insurance’ By historical standards, equities remain overvalued even after their recent declines.  So if the relative safety of bonds continues to evaporate, it stands to reason that investors may start to see value in untapped areas of the market.   In his CNBC interview, Yusko offers some final advice to traders and goes on to explain why a long-term bitcoin investment can act as a hedge against global uncertainties:  People that watch the daily price of bitcoin are really missing the point.  The whole idea of bitcoin is that it’s a store of value It’s a chaos hedge, or ‘schmuck insurance’ as I like to call it.  What we need to think about is the long-term trend. What you want to do is own a piece of the network. You want to have 1, 2, 3 or 5% of your net worth in this asset. Do you think bitcoin works as a hedge against global economic uncertainty?  Let us know in the comments below! Images via Bitcoinist Image Library, The post Bitcoin is ‘Schmuck Insurance’: Morgan Creek Capital Founder appeared first on

Morgan Creek’s Anthony Pompliano keeps over half his net worth in BTC

Anthony Pompliano, the partner at Morgan Creek Digital and outspoken Bitcoin bull, said that over 50 percent of his net worth was in Bitcoin in an interview with CNBC’s Squawk Box. He was then slammed by Shark Tank judge Kevin O’Leary, who said it went against the rules of investing and diversification, calling the move “insane.” Crypto skeptic and Bitcoin bull face off on CNBC’s Squawk Box CNBC’s Squawk Box has become one of the few mainstream platforms for discussing cryptocurrency. The show has hosted some of the most notable faces in the crypto industry, including Fundstrat Capital’s Thomas Lee and Galaxy Digital CEO Mike Novogratz. Recently, the show hosted Anthony Pompliano, the partner at Morgan Creek Digital, and one of the most outspoken Bitcoin advocates in the industry. Pompliano was joined by Kevin O’Leary, a Canadian investor best known for his role as the shrewd money-hungry judge on ABC’s “Shark Tank.” During the short time slot on Squawk Box, the two had a heated discussion about the volatility and lack of real-world usage for crypto. To prove that the extreme volatility of digital assets discouraged people from investing in it, O’Leary asked Pompliano how much of his wealth he held in cryptocurrencies. “If you’re such a believer, how much of your own dough is in it?” O’Leary asked, seemingly unprepared for the answer that was about to ensue. …. “Over 50 percent of my net worth is in Bitcoin,” Popmpliano responded.  "I teach this stuff you never go beyond concentrations of that nature. 50% shame on you! That's nuts!" @kevinolearytv tells @apompliano #btc — Squawk Box (@SquawkCNBC) August 6, 2019 O’Leary says keeping half of your net worth in BTC is “insane” A known crypto skeptic, O’Leary was visibly shocked by the response. “I forbid that, that’s insane. That breaches everything about diversification and investing. That’s crazy!” he told Pompliano. He went on to call the move “crazy,” saying that people should never go beyond concentrations of 20 percent when investing in a single asset.  However, Pompliano went on to explain why he put over half of his net worth into cryptocurrencies. He said that despite being highly volatile, Bitcoin has actually proven itself as a non-correlated asset. That means that it is one of the few asset classes that isn’t heavily influenced by macroeconomic events such as political turmoil.  Pompliano explained that the negative correlation between Bitcoin and other financial markets was shown when the coin surged 55 percent after the trade war between the U.S. and China escalated in May. At this point, he said in a recent blog post, it was almost irresponsible for institutions not to invest in Bitcoin.  Bitcoiners lauded Pompliano’s argument. Many on social media criticized O’Leary as being “condescending” and “arrogant” while giving out advice on things he “didn’t fully understand.” Pompliano, on the other hand, received criticism about being “too soft” on O’Leary. That said, these criticisms should be taken with a grain of salt considering that most of Pompliano’s followers tend to be hardliners about crypto. Nevertheless, it seems the mainstream debate over the merit of Bitcoin continues. The post Morgan Creek’s Anthony Pompliano keeps over half his net worth in BTC appeared first on CryptoSlate.

Bitcoin Price Will Hit $100,000 in Just 30 Months: Morgan Creek

Anthony ‘Pomp’ Pompliano is doing the rounds. On Wednesday, the Morgan Creek co-founder tussled with stock market skeptic and renowned gold bug Peter Schiff. Come the end of the week and he’s once again singing Bitcoin’s tune. This time proclaiming that the flagship cryptocurrency is likely to hit $100,000 in a mere 30 months. Imagine […] The post Bitcoin Price Will Hit $100,000 in Just 30 Months: Morgan Creek appeared first on CCN Markets

Morgan Creek CEO, Anthony Pompliano: “Why Bitcoin (BTC) Will Reach $100,000 USD by 2021”

Pomp it! The versatile cryptocurrency enthusiast spoke to Yahoo Finance on reasons why the price of Bitcoin will eclipse $100K USD in the coming years including the global political and economic instability and the demand-supply economics of the cryptocurrency. The cryptocurrency market is bleeding heavily as Bitcoin (BTC) registers a double-digit loss in 24 hours […]
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