🔥Bitcoin Fund Buying Guide | Paypal, Credit Card & SEPA
With so-called Bitcoin Fund is a new and promising type of investment vehicle. If you deal with the subject of a Bitcoin fund, you can certainly make comparisons with a hedge fund, whereby it should be noted that Bitcoin funds consist exclusively of the digital asset.
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Tip in advance: Obtain information
Anyone who has dealt with the financial market will know that in the end it was only a matter of time before the hottest and most interesting areas in the investment world come together: So it's about funds and Bitcoin - on the one hand, a promising form of investment, which can be recommended above all to security-oriented investors, on the other hand it is about the Bitcoin cryptocurrencywhich was always good for surprises, both positive and negative.
Due to the fact that Bitcoin funds represent an interesting combination, since you use a relatively stable product to incorporate a very volatile product, it is important to find out exactly what you want in advance. Because only if you know the advantages and disadvantages or the dangers and risks, you will not be able to experience any nasty surprises.
What are bitcoin funds?
Investors who, on the one hand, want to benefit from the increasing popularity of funds and crypto fans who believe that they are interested in Bitcoin will increase in the near future, should deal particularly intensively with Bitcoin funds. Because this is about a fund that tracks the Bitcoin - or, if there are several digital currencies in the fund, some crypto currencies tracked. And ultimately, the crypto fan knows that this can be a particularly exciting opportunity to invest your money.
However, it should be noted that there have always been problems and difficulties when trying to invest the very first Bitcoin funds. At the beginning, this was mainly due to the non-regulation of the world's largest cryptocurrency - at least if you go by market capitalization. For example, the Securities and Exchange Commission - SEC for short -, the US financial supervisory authority, hesitated for a long time to make the cryptocurrency market accessible to the general public. This is also the reason why Bitcoin funds often play according to different rules and why their structure cannot be compared with traditional funds.
This means that anyone who is familiar with funds should deal with the functionality of a Bitcoin fund and take a look at the risks and benefits in advance.
The fact is: A Bitcoin fund or crypto fan is an investment vehicle that ultimately shows the performance of a specific asset or group of assets. In contrast to the crypto index, the ETF or the Stock market, the hedge fund is another option to invest in a group made up of certain securities. This is where the management of teams of experts takes place, who always ensure that the composition is rebalanced or that there are always new analyzes of how the values can develop.
Profits are then made from the market maneuvers. That means, if the experts are correct, the investor can look forward to a profit.
At the moment there are two types of so-called crypto hedge funds available: There are those who manage portfolios that only crypto currencies and there are crypto hedge funds that are mixed - that is, there are not only cryptocurrencies, but other types of assets as well. With crypto funds, the hedge funds want to ensure that returns are maximized so that new coins available on the market are added again and again.
What can be understood by a Bitcoin fund
In a Bitcoin fund everything revolves around the Bitcoin cryptocurrency. That is, the price of the mother of all cryptocurrencies is imitated here. Thus, the investor has the opportunity to buy into the fund without doing the extremely complicated and costly one Bitcoin trading process having to go through. As an investor, you can buy into the fund, participate in the rising value of Bitcoin and then sell again when you have posted the profit you want.
A fund owner does not invest directly in Bitcoin here, so one does not Wallet, i.e. the digital wallet, required. This means that you do not have to worry about storage or other security procedures and can concentrate fully on the price development.
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What can be understood by a crypto fund
There are bitcoin funds, as described above, and crypto funds. A so-called cryptocurrency fund refers here to a portfolio that consists of a large number of different digital assets and is managed by either one or only a few people. As an investor, you can buy into the fund so that you make a profit if the cryptocurrencies contained in the fund experience a price increase.
Ultimately, it may be the same type of investment as the Bitcoin fund, with the only difference that here in addition to the Bitcoin other cryptocurrencies are included.
The pros and cons of a Bitcoin fund
If a Bitcoin fund only reflects the price of the crypto currency, then one must ask the legitimate question why it then needs a middleman here. You could, at least in theory, just be direct invest in the cryptocurrency or those cryptocurrencies that, according to personal assessment, have the greatest potential.
There are many reasons why one should invest through a so-called middleman who imposes a fund. As an investor, you don't have to deal with the security procedures associated with holding the cryptocurrency. Furthermore, it is also not necessary to familiarize yourself with Crypto exchanges to deal with. Here, the investor has the option of using the fund to dive into the world of cryptocurrencies much more easily and only having to deal with the risk of price movements.
Another plus point: Experts deal with the development of Bitcoin or the crypto currencies - so it is then that in the course of a bear market "shorts" are carried out, i.e. short sales, if one thinks that the price of Bitcoin will now experience a renewed correction. This is not possible in the traditional market. If you pump your money directly into Bitcoin, your wealth will increase when the price of the cryptocurrency goes up and your wealth will decrease when the price of Bitcoin goes down.
But there are also a few disadvantages that should not be ignored: You have less control over the investment, funds are less adaptive when it comes to new situations and funds cost money - that means you have to pay fees as well, which have a profit-reducing influence.
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How to Invest: A Step-by-Step Guide
Anyone who deals with the world of Bitcoin funds will notice that it can get complicated and confusing relatively quickly. In addition, very high minimum deposits are often stipulated, so that it is often not possible for beginners to qualify for the Bitcoin fund.
Crypto bundle
However, it doesn't always have to be a Bitcoin fund. Before moving on to the subject of Bitcoin funds, it may be advisable to take a look at a crypto bundle. This is about the compilation of several digital currencies. This means that you benefit from the advantages of a Bitcoin fund, but often only have to invest a fraction of the amount that would have been due if you had decided on a classic Bitcoin fund.
The following providers provide so-called crypto bundles and should therefore be given special attention:
eToro: Copy Portfolio Crypto
With the copy portfolio feature eToro only really known, because it has shown Especially helping beginners to want, so that one can make high profits here without actually having a clue of the matter.
Copy portfolios may be a form of trading, but it can be recommended not only to beginners, but also to experienced traders who are looking for a passive form of trading. Copy portfolios are also free; administration takes place through the eToro investment committee.
Today there are already two Copy Crypto Portfolios. Ideal when it comes to invest in cryptocurrencies to want.
The focus of the diversified portfolio is clearly based on the cryptocurrencies, which have a market capitalization of more than 1 billion US dollars. Whereby it is also about the daily trading volume - this averages more than 20 million US dollars. So in the end we only work with the big players.
The Copy Crypto Portfolio is composed as follows:
- Bitcoin = 29,4 percent
- Ether = 13,09 percent
- Cardano = 7,57 percent
- NEO = 7,57 percent
- ZCash = 5,83 percent
- Tron = 5,78 percent
- DASH = 5,10 percent
- Stellar Lumen = 4,80 percent
- IOTA = 4,61 percent
- Ripple = 3,80 percent
- Ether Classic = 3,42 percent
- Bitcoin Cash = 3,30 percent
- Litecoin = 3,29 percent
- EOS = 3,03 percent
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Which Bitcoin funds can be recommended?
If you look for a Bitcoin fund, you will notice that there is a real variety here. It is therefore important to deal with the various funds in advance. But which Bitcoin fund is promising? The following funds are quite interesting and should be examined or at least taken into account in a comparison.
Bitcoin Fund Crypto 20
Crypto 20 may not be a classic fund regulated by banks, but an autonomous as well as tokenized fund. It is a pure crypto index fund.
The top 20 is tracked crypto currencies. This means that a) it is not just about Bitcoin and b) the experienced investor will already recognize that the fund is somewhat reminiscent of the S&P 500, which then contains the top 500 US stocks. Each token represents the investor's share of the underlying asset. The tokens are connected to the assets that have been invested via a smart contract, i.e. an intelligent contract.
As already mentioned, Crypto 20 may not be a classic like pure Bitcoin fund, but it is a balanced fund in which there are promising cryptocurrencies with corresponding potential. The fund is balanced once a week.
It should be noted that every cryptocurrency contained in the fund has a maximum weighting of just 10 percent. For short periods of time it is possible to exceed the 10 percent, but in the course of balancing it is ensured that you come back below the upper limit.
Toba
A Paris based wealth management company founded by Yves Choueifaty in 2005. There are two minority shareholders here: California Public Employees Retirement System (CalPERS for short) since April 2011 and Amundi since May 2012.
Tobam created an unregulated and alternative investment fund. Doing so will institutional as well as qualified investors working in the field Invest in cryptocurrencies want to be given the chance to benefit from Tobam's IT and research systems. Thus, the Tobam Fund should provide the opportunity to invest securely in crypto currencies.
Yves Choueifaty, President of Tobam, said that research is the cornerstone of Tobam and that is exactly why Bitcoin has been examined from a technical, economic, financial and regulatory point of view.
The fund is available to all eligible investors on a private placement basis - worldwide.
Polychain Capital
Polychain Capital was one of the first companies to invest in cryptocurrencies as well as blockchain technology. Thus, Polychain Capital is one of the driving forces when it comes to driving technology as well as cryptocurrency into the middle of society.
An investment management service is offered here, which ensures that investor funds are collected, which then flow directly into crypto companies. A hedge fund is operated which, through an actively managed portfolio, ensures that exceptionally high returns can be achieved here.
In addition, Polychain Capital has already started to invest in different sectors, so that it is easier, especially for startups, to collect money for operations such as expansions.
Iconomi
Iconomi can actually be compared to a mutual fund company for stocks. The difference is in the focus on the blockchain assets. Different investment instruments are offered here, depending on the willingness to take risks. You can also create your own fund here - this can then be bought or sold without any problems.
Smart contracts that work with Ethereum are used to manage the investments made on the platform. In addition, all funds are stored in a so-called Multi Sig storage solution to protect them from attacks.
Our conclusion: Are Bitcoin funds worth it?
We at Bitcoin News.one find that Bitcoin funds are an interesting option when it comes to investing in cryptocurrency over the long term. With crypto funds, there is another option available if you are of the opinion that there are other digital currencies with corresponding potential in addition to Bitcoin.
If you think that in the long term only Bitcoin has what it takes to generate corresponding profits, then it is of course understandable to invest exclusively in a Bitcoin fund.