The higher returns of traditional direct stock investment carry extra baggage – higher risk due to stock market volatility, higher fees (you pay pricy portfolio managers 2% to 3% for managing trades), and if you lose you lose it all. This is the major reason why more than $1 out of every $5 heading for equity markets goes into an index fund. Index funds are touted as the fastest growing investments in the market where you use a passive investment approach performing in sync with the market, not attempting to beat the market.
The same index fund strategy that is succeeding with stocks and commodities is now being applied to cryptocurrencies. The cryptocurrency index fund by Cryptos Fund offers an alternative that overcomes the volatility of the stock market and promises substantially better returns over the longer term. With a Crypto Index Fund in your portfolio, you’re not weighed down by temporary setbacks and sharp market downturns.
Why It Makes Sense to Shift From Direct Active Investment to Passive Index Investments
It’s much more sensible to avoid buying single cryptocurrencies and to instead focus on buying into cryptocurrency index funds. There are solid reasons to support this viewpoint. For one, it’s a bit challenging for non-tech investors to adapt to the steep learning curve in a volatile cryptocurrency market. It’s mentally taxing to navigate a minefield of crypto platforms and wallets to gather your portfolio of single cryptos. What a Crypto Index Fund does for you is to manage the confusion so that you’ll be spared the hassles of controlling and monitoring single cryptocurrencies.
With single Cryptos You Win or Lose; With a Crypto Index Fund It’s a Win-Win Situation
If you bet on the win-ability of single coins, you never know whether you’ll emerge the winner or loser. If you were focusing exclusively on trading single cryptocurrencies, you’d be exposed to the never-ending risk of a cryptocurrency fading out or moving down the ladder of market popularity. Such a risk is downplayed in a Crypto Index Fund because you are not investing in separate coins; you’re investing in the entire crypto market.
Single Cryptos Give You a Roller-Coaster Ride, but With a Crypto Index Fund You’re in Cruise Control
For people that have money to dispose at will, flying high with the equal probability of winning or losing might create an adrenaline rush. But for the vast majority of investors like us, we’re placing our retirement funds and hard earned money in the line of fire when burning issues such as the kid’s education or our retirement future are at stake. The Crypto Index Fund averts the need for continually following market trends and adapting to such changes at breakneck speed.
Explosive Market Growth: Single Biggest Reason Propelling Crypto Index Fund Growth
If you see the cryptocurrency market from the narrow viewpoint of setbacks and downturns, you’ll see only an extremely volatile market, but overall the market has grown phenomenally experiencing gains that are over 1000 percent in a period spanning eighteen months. And, this growth has been driven not just by speculation but by solid investment planners that are keen to get a piece of the action in the Blockchain revolution.
It is one thing to become disillusioned by that fact that Bitcoin pierced the 20k ceiling in January 2018 only to climb down to 6k, but that should not hide the fact that Bitcoin has grown impressively from the modest level of 880 USD just a year back. The end result of the sharpest of downturns is that Bitcoin appears to have stabilized. Now if you sit back and think hard regarding the impact that blockchain technology is likely to create soon not only in cryptocurrencies but other invaluable applications, you’ll begin to realize the sheer potential of crypto as an investment destination.
While Doomsayers Are Shouting Cryptos Are Dying, Institutions and Governments Are Legitimizing a Powerful Asset Class
Influenced probably by the unending volatility and sharp downturns characterizing the market, media houses are already declaring crypto as dead. But reality presents a different picture.
Financial Powerhouses Are Building Cryptocurrency Platforms
Globally influential institutions such as NASDAQ and ICE are busy setting up cryptocurrency trading platforms where minimum investments pouring in are a quarter of a million upwards.
Governments Are Attracted by the Potential Growth of Blockchain Applications
The decentralized nature of blockchain moves the technology beyond the pale of government interference and policy. Yet, governments all over the globe are actively taking an interest in blockchain because of the growth potential of applications spawned by this technology. Even if governments are unable to influence the transactional technology behind blockchain, governments are framing cryptocurrency regulation to control the market where crypto transactions and trading are growing phenomenally.
Economic Blocks Are Enacting Regulatory Frameworks to Control Crypto Markets
And if you thought that only governments are after cryptocurrency trading, think again because powerful economic groups like the G20, the International Monetary fund (IMF), and the Organization for Economic Co-operation and Development (OECD) are moving seriously to enact regulatory frameworks for the use of blockchain technology.
How Are Investors Affected by What Governments, Institutions, and Economic Blocks Do?
Why are we discussing governments and economic groupings and their policy moves? Because when cryptocurrencies gain recognition and become legalized, we’ll be creating a new asset class that will grow more explosively than ever before. This will be the moment when Exchange Traded Funds (ETFs) and institutional investors will move on board propelling the crypto market to multi-million dollar market capitalization. This benefits ordinary investors like you and me that had the foresight to stick to cryptos early on.
6 Top Reasons Why Cryptocurrencies Are Poised to Become the Currency of Future Trade
The frequent devaluation of major conventional currencies has rocked the markets creating greater instability in world commerce. This has motivated people to park their funds in cryptos which are decentralized and far removed from government control. Blockchain technology also protects the currency from tampering and ensures the safety and privacy of investors.
The massive movement of fiat currencies into cryptocurrencies has sparked attempts by financial institutions to legitimize cryptocurrency trading. The Bakkt Cryptocurrency Exchange is backed by Atlanta-based ICE which owns the NYSE and proposes to handle only Bitcoin-Fiat currency trading initially. The new exchange will be directly competing with Coinbase, the older more well-established crypto exchange. Not to be left behind, the Federal Reserve and other Central Banks are cautiously framing regulatory policies.
The Crypto Index Fund promise much higher returns than direct investments in cryptocurrencies. If the initial boom in cryptocurrencies was powered by a bull run in an emerging field, a bigger boom is in the offing fuelled by true long-term investor sentiment.
Safety and Security
Security is the biggest gain. With a trusted third party managing millions of dollars in cryptocurrency equivalents, offline wallets protected by secure private codes and digital signatures are used for parking crypto assets, and this prevents hackers from accessing your critical assets. Compare the situation with that common in major Banks that are never safe from frauds, scams, and frequent hacking. Secure servers keep track of your digital assets, and hardware wallets are located at secret centers far from prying eyes.
Even under the same platform, multiple exchanges redistribute assets to reduce exchange risk. There are comprehensive disaster management protocols in place to safeguard investor interests.
The risk of losing assets through compromised computers is to a large extent mitigated by cryptocurrencies because the blockchain protocol promises a high degree of safety tied to cryptographic security codes. Even investor privacy is guaranteed, and one’s identity need not be revealed when you transact in cryptos.
The biggest gain a Crypto Index Fund promises is the protection you get from market volatility. What an index provides is a collection of cryptocurrencies that are making maximum gains in a volatile market. Even if single cryptos lose or suffer setbacks, the index shields you (the investor) against such losses by propping up other cryptos that are gaining and nullifying individual losses.
An equally weighted index spreads your investment across the top performing cryptos in the market judging their core market cap. So instead of focusing on a single cryptocurrency, your investment is diversified across different cryptos in a booming market. You can rest assured that your invested index covers almost 75 percent of the cryptocurrency market, and you hold assets that are continually making gains for you.
Even the earnings made by the cryptocurrency exchanges are plowed back into the index fund making sure that your financial benefits are maximized, and someone else is not growing at your cost.
The Crypto Index Fund is comprehensive in its coverage of digital currencies and unlocks lasting value for long-term investors. These funds are cost-effective and low-risk vehicles for investors to buy into the crypto market without any of the drawbacks that characterize regular stock market trading. No other investment token provides such massive diversification yielding much higher value.
Once governments and institutions frame rock solid guidelines and regulatory policies, any and all reservations investors may be harboring regarding the security of their digital assets will vanish to be replaced by confidence and trust. By eliminating guesswork, the Crypto Index Fund becomes the smart strategy that gives you maximum value for every dollar invested.
With more than 1500 cryptocurrencies arrayed before you, predicting the long-term success or failure of single cryptocurrencies is a challenge even for hardened market veterans. The Crypto Index Fund provides a single headache-free investment option that offers greater value addition besides being low in costs and carrying a lower risk profile. Whether or not you decide to invest in a Crypt Index Fund depends a lot on how pessimistic you become regarding the downturns of a volatile crypto market as opposed to your willingness to use an index to make maximum tension free gains.