ICONOMI and Other Crypto Funds: How To Increase Your Profits!
Crypto index funds are attracting a lot of attention in the world of crypto investing and will be one of the hot topics for 2019. Index funds make it possible to avoid the hassle and stress of managing your own crypto portfolio. The best index funds also help diversify risk by spreading your investment across a wider range of coins. In this way, the investments are protected from the volatility of the market.
Cryptocurrency index funds work just like any other index fund. Essentially, you are buying shares in a fund. This fund consists of a selection of different cryptocurrencies. So you don't invest directly in a specific coin, but buy into the fund. The fund then invests your money across the selected cryptocurrencies.
When you invest in a fund, you don't have to worry about setting up wallets or tracking coin prices - all of this is handled by the fund manager. This service naturally entails fees that vary from fund to fund. A higher fee does not necessarily mean a better managed fund. It is important to do extensive research before investing! Because of this, we are from Bitcoin-News.one analyze some of the most popular cryptocurrency index funds that could become even more interesting in 2019.
Iconomi is a platform for index funds. Iconomi offers a wide range of index funds, some of which have really interesting criteria for the coins they contain:
There is the Delta Summit Index (DSI), an index that contains coins, based on a vote of participants in the DeltaSummit - a leading blockchain innovation event. Only time will tell whether this is just a gimmick or whether pooling knowledge in this way actually leads to a well-functioning fund.
The Solidum Prime Index (SOPR) has the same amount of capital (4,35%) based on 23 different currencies. This is the first fund from this article to show a majority in altcoin capital. The purpose of this index is to isolate it from the risk of a single currency depreciating in value while retaining the potential to capture lesser-known altcoins that suddenly skyrocket.
Iconomi has a large selection of index funds that offer something for everyone: From the simplest index funds, a simple division between Bitcoin and Etheruem, to real niche offers.
In the current crypto bear market, it's not surprising that the best performing funds in the Iconomi are the more conservative. In fact, the Coinbest 1 index fund (CBST: "Point of Reference for the Most Conservative Crypto Investors") outperforms all existing index funds. This fund focuses on the least volatile investments. This lack of volatility is intended to represent a sustainable value. As of this writing, that fund is managing nearly a quarter of a million dollars.
Other crypto funds: Coinbase funds
Coinbase has become an industry-leading exchange platform thanks to its user-friendly interface and trustworthy reputation. In order to benefit from this popularity and the large user base, Coinbasenun offers an index fund that currently tracks seven crypto currencies: Bitcoin, Ethereum, BitcoinCash, Litecoin, Ethereum Classic, Ox and Basic Attention Token (BAT). BAT is the latest addition as it was only added to Coinbase's trading platform in early November 2018.
As expected, the vast majority of the fund consists of Bitcoin. As of this writing, Bitcoin makes up just over 75% of the fund. Here is the full breakdown:
Bitcoin - 76.38% - Bitcoin
Ethereum - 14,55%.
Bitcoin Cash - 5,71%.
Litecoin - 2,02%.
Ethereum Classic - 0,64%.
0x - 0.44%
BAT - 0,25%.
What is striking about this fund is that including the altcoins there is nothing exciting or unexpected. Coinbase largely sticks to the most popular cryptocurrencies. The fund therefore focuses on large market cap coins, which should be less volatile than smaller market cap currencies.
BB index offers a selection of index funds associated with Olympus Labs, a blockchain financial ecosystem. This means that there is a large amount of crypto expertise behind this index fund establishment.
Interestingly, there are 26 different index funds to choose from, which offers enormous flexibility and covers a large part of the cryptocurrencies. Whether you just want to buy into the seven best cryptocurrencies or prefer to invest in altcoins, there is a BB index fund that will suit you. In addition, the funds vary in the number of coins they contain. For example, the B7 focuses on the top 7 currencies, the B50 on the top 50 currencies.
This means that investors can really customize their portfolio by investing in multiple index funds and finding the right balance between risk and payoff for them.
At only 0,99%, the Cryptos Fund has the lowest management fee of all index funds listed here. The reason for this is that it is passively tracking the cryptocurrency index 30 and is thus intended to convey a completely transparent and carefully thought-out index.
The cryptocurrency index30 shows the thirty best performing currencies according to their market capitalization. If you are looking for in-depth data & stastics related to cryptocurrencies, this is a great place to do your research.
Since the Cryptos funds track this index, you split your investment into a broad portfolio when you buy-in. This protects you from volatility, but also throws the net far enough that you can catch a stellar, powerful coin.
There is no straightforward answer to the question, “Which crypto index fund should I invest in?” The answer obviously depends on what exactly you want to achieve. If you are new to the cryptocurrency world, the Coinbase Index Fund might be the way to go - He is a trusted name in the industry with a proven track record and a user-friendly website.
However, if you are more familiar with the world of cryptocurrency, then perhaps Coinbase's lack of access to altcoins and their potential for stellar growth will move you more towards one of the wilder index funds.
In the current marketplace, more conservative index funds should do better. However, should there be another “crypto bull run,” conservative index funds may be less well positioned to generate massive growth. Ultimately, it all comes down to how high the risk is that you are comfortable with.