Investing in Digital Currency: Benefits of Crypto Index Funds

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Investing in Digital Currency: Benefits of Crypto Index Funds

Unlike government regulated fiat currencies such as the dollar that can be traded through a stock exchange, cryptocurrencies are digital currencies that are traded and transacted using blockchain technology. As of January 2018, the cryptocurrency market has notched up over $650 billion in market capitalization. But there’s a problem. There are over 1500 cryptocurrencies in circulation, and it becomes exceedingly challenging to invest in these currencies and overcome the market risks associated with such investments.

The cryptocurrency index fund by Cryptos Fund resolves the issue by reducing the complexity of an investment decision, avoiding wastage of time involved in sifting the good eggs from the bad, and maximizing returns by investing in an index that is tied to the top performing crypto coins in the market.

Consumers stand to benefit through lower upfront costs because the crypto index fund is digitally operated in a simple, streamlined process through customized trading platforms that exclude middlemen.

4 Fabulous Benefits That Make Crypto Index Funds a Worthwhile Investment

Cost-effectiveness

The fees are marginal, mostly below 1 percent, and transactions do not involve hiring third parties like banks and brokers that charge higher commissions.

Decentralization

The operations are securely conducted in the Blockchain, utterly independent of third-party involvement.

Automation from start to finish

Instead of a portfolio manager handling currency investments arbitrarily, digital automation handles crypto coin selection, tracking, and performance monitoring.

Near Instantaneous transactional speed

While advanced algorithms track each crypt coin wedded to the Crypto index Fund, smart contracts inside the blockchain platform perform transactions at breakneck speed outside the purview of human interference.

Reasons Why Passive Crypto Index Fund Earnings Are Superior to Direct Investments

The intelligent investor would be happy to gain exposure to the fast-growing cryptocurrency market without facing the risk of managing individual cryptos. The Crypto Index Fund solves the problem by saving the time the investor spends on researching each and every crypto coin in his portfolio. All the investor has to do is to track the performance of the crypto fund as a whole and not waste energy on individual cryptos. The company organizing the index fund has already done its research and has listed the top performing currencies that should maximize your profits.

As the crypto index fund gradually outperforms individual currencies and sheds the baggage of low-performing crypto coins, the index starts gaining popularity and becomes much sought-after in the trading arena. Whether you’re an institution or an individual, all you have to do to grab a slice of the action is to own a multi-currency index portfolio based on just one token.

4 Solid Reasons Why Investors Are Bullish About Crypto Index Funds

The world is adopting blockchain with a vengeance, and four factors are pushing growth; contributing factors that’ll gladden the hearts of investors:

The World Is Moving Towards Market Regulation

Influential forums like the G20 are aggressively pushing for global management of the fast-growing crypto market.

A regulated market will boost investor confidence because it will guarantee legal protection and financial security, and a framework for addressing issues arising from online crypto trading. Regulation will spur massive participation of both investors as well as the blockchain developing community.

Digital Currencies May Become National Legal Tender

The US doesn’t treat cryptos as legal tender but has not fought shy of categorizing cryptos as “assets.” A few nations, including the US, are toying with the idea of setting up a national cryptocurrency. When this happens, it will create a significant ripple in the market and will tap into millions of dollars’ worth of digital currencies that are securely traded from digital cryptocurrency wallets.

The Rise and Fall and Growth of Bitcoin

It goes without saying that the outstanding performance of Bitcoin, its majestic rise and dramatic falls notwithstanding, has triggered enormous interest in cryptocurrencies. We are witnessing a scenario where Bitcoin is holding steady and appears to be stabilizing around $6000. If one discounts the ups and downs of a tumultuous market in 2017, the fact remains the Bitcoin’s now trading ten times its pricing level of $600 in October 2016. Bitcoin market cap crossed the $100 billion mark, and there are 21 million coins in circulation.

The Expanding Global Footprint of Blockchain Technology

Being decentralized and far removed from government control, Blockchain has effortlessly cut through national boundaries and divisions creating a virtual market playing a massive role in wealth creation. The traditional financial systems including banks, realizing Blockchain’s disruptive potential, are cautiously integrating the new technology into global operations.

These four prominent growth factors will ensure that the crypto market stays relevant in the scheme of investor interest. The percentage of crypto assets will shoot up just as the market share of cryptos (vis-a-vis other commodities) will grow exponentially in the years to come. Crypto market analysis will get a shot in the arm as investors start hunting for top performing cryptos that are tied to indices.

The 5 Top Cryptocurrencies Engaging Crypto Index Funds in 2018

Blockchain and Bitcoin

Bitcoin was the very first cryptocurrency to break into the market, and it owes its meteoric rise to the Blockchain. This is a technology that encrypts transactions in a distributed public ledger controlled by millions of computer nodes. The operations are conducted in an uber-secure ecosystem protected against cyber-attacks of the kind that targeted traditional banks.

By the fag end of 2017, there were 17 million BTC in circulation; the price per coin settled at $6,000, and both businesses and individual users were giving Bitcoin the thumbs up in a variety of transaction and trading activities. Bitcoin’s volatility is subdued, and its value has stabilized.

Ethereum and Ether coins

Ethereum is very popular as a blockchain platform that runs a smart contract system that can be automated to transact and trade currencies without third-party interference, without experiencing any downtime, and in a safe and secure environment that is hack-proof. ETH tokens number 100 million in circulation, and market cap was nearing $50 billion.

Ethereum is in some ways superior to Bitcoin in transactional speed and cost-effectiveness. Also, mining of its cryptocurrency Ether produces a consistent number of coins, unlike Bitcoin.

Ripple and XRP coins

With Ripple, you get access to a fast and cost-effective remittance system through which real-time gross settlement of currencies is possible. Built on an open source Blockchain platform, Ripple transactions are speedier. Its cryptocurrency is XRP which completes transactions in three seconds. Banks and large institutions are taking to Ripple in a significant way. Currency coin circulation levels crossed 39 billion (market cap $29 billion).

Stellar and XML coins

Merely logging into the Stellar Blockchain platform makes you battle-ready to transact in cryptos. A fiercely competitive platform that is great at delivering high-end services, Stellar is a hot favorite of corporates, multinational companies, and non-governmental agencies. XLM has 18 billion coins in circulation with and a market cap of $6.7 billion.

Litecoin and LTC coins

Litecoin’s USP is its lightning-fast currency transfers from and to any point in the world through peer-to-peer networking. Litecoin is a modified superior version of Bitcoin enabling faster transactions, scalable trading volumes, and expanding community support from individuals and industry. With a market cap of $8 billion, there are 56 million LTCs in circulation.

How the Crypto Index Fund Strategy Benefits Investors Through Higher Returns

The core strategy is that the investor is tying his funds to an index that is representative of the top performing crypto coins looking to the coins in circulation and market cap. The investor’s fund is no longer tied to the apron strings of individual crypto coins, but he is betting his money on the entire crypto market. Every crypto staked in the index is merged into a single token representing the investor’s share in the Crypto Index Fund.

This approach works well because the index measures the performance of top coins in the market, and when overall market performance zooms, investor returns also rise. Contrast this to the scenario where you make direct investments in individual currencies that may lose steam and become victims of volatility.

In the traditional stock market, we could aspire for higher returns only if we adopted a higher investment risk. The Crypto Index Fund turns the philosophy on its head. The Crypto Index Fund makes it possible to secure higher returns at much lower risk levels.

Moreover, the gains an investor makes through Index funds are based on realistic statistical models that are not handled by humans but are measured and monitored by advanced machine algorithms. The transactions and data analytics are smarter as they eliminate third-party interference. The index gains are measurable and transparently traceable.

Conclusion

The disruptive nature of the Blockchain technology and the cryptocurrencies it has spawned should be viewed not as a threat but as an opportunity for investors to gain profitable exposure to this market. The multiple platforms on display are offering easier access to digital currencies that can be sold and transacted in a secure and safe ecosystem. For the layman, there can’t be a better or more reliable solution than the Crypto Index Fund to secure trading at lowered risk with the promise of significantly higher returns. 

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