You shouldn’t miss the crypto rush.
It is OK If you were not there in 2017 during the great bull run of crypto. But now it is 2019, and there are plenty of ways to invest in Bitcoin and similar cryptocurrencies.
Most, importantly, the investment vehicles now have a variety depending upon the risk appetite of the investors, much like we have options in the traditional investing world.
Furthermore, crypto space needs more vehicles of investment, which can give peace of mind to the investors because of its hyper-volatile nature.
One such vehicle is index funds, and we all know the concept of index funds is not new.
Now we have crypto index funds too through which investors can minimize their risk and diversify their crypto portfolio as per their needs.
Here are some the crypto index funds one can look at as of now:
5 Cryptocurrency Index Funds For Investment In 2019
Bitwise pioneered the crypto index funds since its founding in 2017.
The company is based out of LA, USA, and is comprised of some best asset managers in the world who have a decent amount of experience in traditional finance.
Bitwise offers rules-based crypto indexes where network liquidity, distribution, regulatory scenario, etc. are taken into account, making it smart and convenient to invest in cryptocurrencies.
As of now, Bitwise offers these four types of crypto indexes:
- Bitwise 10 Large Cap Crypto Index
- Bitwise 20 Mid Cap Crypto Index
- Bitwise 70 Small-Cap Crypto Index
- Bitwise 100 Total Market Crypto Index
But as of now, these indexes are not open for everyone to invest in. The only U.S. accredited investors, with a $25,000 minimum investment, can invest in Bitwise index funds.
Lastly, their security is top-notch, and your coins are securely stored in air-gapped crypto cold storage. I know some of you might think:
Aren’t cryptocurrencies to be held by yourself?
Of course, you should do that, but for now, there are no index funds that allow you to diversify your risk as well as allow you to hold your keys.
Conceived in 2017, Crypt20 is another crypto index fund that started with an ICO.
The crypto index fund constitutes of top 20 cryptocurrencies by market capitalization balanced with FTSE Russel’s capping methodology as per its description in its whitepaper.
The way to invest in the Crypto20 fund is quite easy as it is represented by Etheren based token C20, which traded on several public exchanges such as HitBTC and P2Pb2b etc.
Meaning, unlike Bitwise, there is no exclusivity here, and any regular investor from any part of the world can invest in the Crypto2o index fund.
As we speak, these are cryptocurrencies that form the Crypto2o index fund: ETH, BTC, XRP, BCH, EOS, LTC, BNB, ADA, TRX, XMR, IOTA, DASH, XTZ, ETC, NEO, etc.
So if you are interested in owning these currencies altogether to reduce your risk and asset management headache, Crypto20 is the way to go.
Lastly, they have even launched Crypto10 Hedged, which includes the top 10 currencies with a lot more focused portfolio options for aggressive investors.
CCI30 is another rule-based cryptocurrency fund designed to introduce investors to the world of cryptocurrencies in a risk-minimized way.
The fund proactively measures overall growth, volatility, long-term trends, sectorial review of 30 largest cryptocurrencies by market capitalization.
Luckily, you can invest in this crypto index because there is an actively managed crypto fund based on CCI30. The fund is managed by three experienced professionals who are academicians, quants and security experts with a management fee of 1% annually
The fund is registered in the Cayman Islands and is subject to the regulation of the Cayman Islands Monetary Authority.
#4. LyCI – Lykke Crypto Index
The LyCI crypto index was launched in late 2018 and did a pretty good job of showing the growth of crypto index funds.
It is a weighted index based on the market cap of the top 25 cryptocurrencies with the largest market capitalization giving you a reliable benchmark to measure overall market performance.
Of course, there is an ERC20 token for this fund also, and it is known as LKK tokens. Simply owning LKK tokens means being invested in the top 25 cryptocurrencies as per the logic of LyCI.
As of now, there are 7000+ holders of LKK tokens, and if you wish to invest in it, you can do so. You need not be an accredited investor for participating in this fund.
On and all, LyCI, provides reduced risk, reduced time, and reduced cost for participating in the crypto revolution for less risk-averse investors.
SETs are tokenized baskets, which are itself ERC20 tokens for making crypto index funds.
It is based on a SET protocol that aims to provide a plethora of tokenized baskets represented by different ERC20 tokens. Each of these baskets will be called a SET.
Using this, you can create and manage your own tokenized assets, which you can sell to other crypto index fund buyers and charge them management fees.
This way, anyone can make their next S&P500 like an index fund in the crypto world. As of now, some of the SETs or crypto index funds that are available here for your investments are:
- BTC ETH 75%/25% Weight
- ETH BTC 75%/25% Weight
- BTC ETH Equal Weight
What Are Cryptocurrency Index Funds?
As I shared previously, the idea of crypto index funds is not new.
It dates back to some considerable time and comes from the traditional investment world.
I am sure; you must have heard about the DOW index or the S&P500 index as the best example.
Using index funds to invest, you are only left with the stock market risk and eliminates individual stock risks, sectorial risk, or managerial risk.
Furthermore, inherently cheap to service with minimal costs and still providing near market returns, making it an attractive option for not so risky investors.
There are several ways of making an index fund, for example, based on price, capitalization, performance, volatility, distribution, etc.
Similarly, in the cryptosphere too, you will get two types of crypto index funds such as:
- Price-weighted index
- Capitalization-Weighted Index
Anyway, that’s it from me.
Meanwhile, you can tell: Do you like the concept of crypto index funds? Which crypto index funds do you think are superior? Have you ever invested in one of these?
Let us know in the comments below 🙂
I will see you soon. Cheers 🙂