As tracked by CoinMarketCap, the trading volume of cryptocurrency is increasing rapidly. Many new enthusiasts and some of the traditional investors have started turning their heads towards the digital assets. Model of “Decentralisation” followed by the blockchain technology cryptocurrency has become one of the core reasons for the expansion of the crypto space. As cryptocurrencies empower the individuals to own, control, and manage their own funds, a large amount of responsibility has to be bear by the users only. Managing different assets on different exchanges, crypto wallets, portfolio management, and many more, sometimes frustrates the user and he ends up with nothing. As the market capitalization is increasing, many of the companies are introducing the products and services to reduce the complexity of the investment procedure. Amongst the new inventions, one of the segments which is becoming popular is that of cryptocurrency Index funds which helps in managing a crypto portfolio. In this article, let us try to explain to you about the index funds and list out the top cryptocurrency index funds.
What Is Cryptocurrency Index Funds?
The cryptocurrency index fund is slowly becoming the next buzzword in the world of the digital marketplace. Simply, Index funds are utilized to automate the process of investing in crypto assets for an investor. You can avoid banging your head while managing and tracking your very own crypto portfolio and at the same time protecting your investment from market volatility by deploying Automated Crypto Index funds. Crypto index funds are basically a representation of a market index in terms of crypto assets. Their mostly weighted portfolio consists of the top ten crypto assets of the crypto marketplace. It is like you buy shares in a fund (basket of different crypto coins) and then the fund invests your money in multiple cryptocurrencies. In this way you can save yourself from trading every time when one or the other currencies outperform and managing your assets as fund managers are there to rescue you and invest or rebalance your funds.
Top Cryptocurrency Index Funds
Before investing in any of the funds, you must be well aware of their terms and conditions, the type of assets they invest in, and also about the security of your funds. To help you find the reliable fund manager, we are going to brief you about the crypto index fund comparison.
C20 or Crypto20 is made up of a predefined(cannot be changed by the investor) portfolio of the top 20 cryptocurrencies with a set strategy for buying and selling of assets and thus maintaining the balance of the funds invested. C20 is a tokenized crypto index fund which means by purchasing a single token, you can subscribe to the index of funds. With a user-friendly interface, lower transaction fees and the real-time tracking function makes it popular among top cryptocurrency index funds.
Automated trading, portfolio rebalancing, and market indexing are three of the major specialties of Shrimpy. It provides a customized way to create your index funds based on a variety of parameters like weighting, minimum and maximum asset allocation, asset buffer zone, and many more. You just need to select your funds and set the rebalancing period, rest is taken care of by Shrimpy.
CryptoIndex is one of the automated cryptocurrency index funds which brags about using more than 200 factors to rank and select among the top 100 cryptocurrencies. Every month, with its feature of smelling about the artificially inflated price of the coin, CIX100 rebalances your portfolio. Either you can customize your basket of coin or you can choose from their predefined asset’s baskets to rebalance your assets with an AI-based platform.
With its non-custodial features (users control all of their funds and need not to share their wallet keys) and low minimum level of investment, EmberFund is popular among the new investors. Any predefined portfolio can be chosen and purchased using BTC and then the fund managers of EmberFund will take care of your funds.
Bitwise is one of the pioneers in the cryptocurrency index funds market where five-year diluted market capitalization(inflated adjusted) of the cryptocurrencies are taking into consideration to rank the top ten currencies in crypto markets. Multi-sig technology deployed by Bitwise ensures the security and privacy of your invested funds.
You guessed it right, it is one of the reputed exchange platforms which had recently launched the services related to automated cryptocurrency index funds. Keeping their index funds highly refined, Coinbase tracks seven of the known cryptocurrencies in the market. To rebalance the funds, it focuses on coins having huge market capitalizations and less volatility.
Bit20 is one of the unique kinds of cryptocurrency index funds that work in the form of Contract for Difference or CFD. Every month, the portfolio is managed on the basis of the ranking of the market capitalization of the top 20 cryptocurrencies. It is considered as one of the stable and reliable index funds because of its position in crypto space.
With the lowest transaction and management fees, CryptoFund has become one of the first choices of the newbies. It tracks the progress of the top 30 cryptocurrencies and gives a detailed picture of the crypto marketplace. With a basket of assets, CryptoFund hedges the risks of losing the money in the crypto market.
Crypto index funds provide you a unique investment opportunity to rebalance the profits and losses associated with crypto trading. Though a number of index funds are available in the market, it totally depends on your needs, requirements, time period of holding currency, and the amount you are going to invest along with the variety of features provided by various platforms.
A wide variety of services and products available in the crypto markets have opened up the world of digital currencies not only for institutional investors but also for the new crypto traders. Cryptocurrency index funds are one of the examples which is turning enthusiasts into investors. This tool manages the fear and emotional disbalance of investors while managing and rebalancing their crypto investments. So, if you wish to invest in cryptocurrency, you can try investing in index funds so that you might averse the fear of losing your funds and can gain the associated profits.
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