Morgan Creek and Bitwise partner to create the Digital Asset Index Fund, a cryptocurrency fund offering the top 10 digital assets for institutional investors
Context & Ripple Effects
Morgan Creek and Bitwise are launching the Digital Asset Index Fund months after Coinbase's asset management unit unveiled a market cap-weighted index fund in March and then opened it to accredited US investors with $250K minimums in June — 2018 is the year passive crypto vehicles stop being an experiment. The twist here is the buyer: this fund is built explicitly for institutional investors rather than wealthy individuals.
The structure also proved durable for Bitwise itself: three years later the firm raised a $70M Series B at a $500M+ valuation, with index funds cited as its core business.
First-order effects
- Institutional investors gain a single packaged vehicle for the top 10 digital assets, removing the operational burden of buying and custodying ten tokens separately.
- Coinbase's index fund now has a direct competitor chasing the same passive-exposure mandate, splitting the nascent institutional allocation pool between two structures.
Second-order effects
- Other crypto asset managers feel pressure to productize — Multicoin was raising toward a $250M fund the same month, showing active and passive managers racing to institutionalize simultaneously.
- Index providers compete on methodology and fees rather than token selection, since a top-10 or market-cap-weighted basket converges on largely the same holdings.
Third-order effects
- If passive crypto vehicles keep proving out, the endgame is traditional finance acquiring the specialists rather than building their own — the path later taken when Franklin Templeton agreed to buy CoinFund spinoff 250 Digital to form Franklin Crypto.
- Index funds become the default institutional on-ramp to digital assets, shifting industry power toward whoever controls the benchmark definitions and the wrapper.
The trend: Crypto asset management is consolidating around index vehicles as the institutional entry product, moving from boutique 2018 launches to traditional-manager acquisitions of crypto-native firms.