If you want to invest in the Cryptocurrency industry and not bet on a single coin, then investing in Cryptocurrency funds is probably your best bet.
Wow! 2 weeks ago I wrote about Cryptocurrencies as Bitcoin was approaching $10,000 and now it’s sky rocketed past that as high as $19,000 and now currently at about $16,800! What a wild ride for those that are invested in cryptos!
What are Cryptocurrency Funds?
They are a collection of cryptocurrency coins sold as a single entity allowing investors to invest in several coins by just buying one thing. 2 weeks ago I was interested in investing in such a fund so I’ve done some research and found a few to talk about.
First a note of caution
As of this writing, all these funds are very new, many companies are unregulated and/or outside the country, and millions of dollars worth of cryptocurrencies have been lost/stolen at various turns of this crazy roller coaster ride. So, I wouldn’t recommend doing anything you can’t handle. I am writing about a few funds that i’m interested in, but I do not know their reliability, ethics, or efficacy.
Hold10 is a passively managed fund by Bitwise Investments, who look like a pretty solid team in the US. Hold10 will hold the top 10 cryptos by market cap using a weighted average. You can checkout their portfolio to see their current asset percentages. Their fees looks to be at 2.5% (annually) which is pretty high for a passively invested fund, but the industry is hot, exchange rates can be pricey. I have requested an invite, but haven’t heard back. On their signup page it mentions “Investment is currently limited to U.S. accredited investors with a $25,000 minimum. “
The Token Fund is open now for registration and you can see their portfolio holdings which are updated live on google sheets whenever there is a rebalancing. I have signed up and waiting for verification which they said can take 2 days. Their fee system is a bit strange as there is an entrance fee of 5% to buy “tokens” which represent shares backed by their portfolio. There is also a 5% fee on exiting the fund. Those are some pretty steep feeds, but there are no mention of fees holding the tokens. So a long hold might be worth it.
Crypto20 is a fund holding the top 20 cryptos by market cap. Even though it’s weighed by market cap, each coin is maxed at 10% of the portfolio for diversity and probably loss prevention. The portfolio of their holdings is on their homepage and they rebalance once a week. I don’t really like the 10% cap as it seems to artificially hold back the winners, but I don’t have the stats to prove it. They are closed currently to the public, but opening up again sometime in January 2018. I am very interested in this one as their fees are supposed to be 0.5% annually.
Satoshi Fund is another token based fund similar to The Token Fund. They have a 5% entrance and exit fee. I think both The Token Fund and Satoshi Fund is run by Russians and maybe this is how they do their fees over there. You can invest in getting a piece of the Satoshi Pie and view their portfolio.
The CCI30 is just an index, but I thought Id mention it here for people who want to see the cryptos industry as a whole.