As at today, the market capitalization of the over 1300 cryptocurrencies is about $150 billion, and it’s expected to rise. It is a stark contrast to $13 billion that was recorded at the onset of 2017.
However, irrespective of the terrific growth, the industry is still complicated with new, less-savvy crypto-enthusiasts even getting it difficult to invest in it. It is this confusion that prompted the creation of a startup that hopes to bring sanctity through a private index fund.
The World’s First Cryptocurrency Index Fund
Bitwise Investment recently unveiled a passively managed index fund that has the best 10 coins by market capitalization. The San Francisco-based startup’s Hold 10 index comes with a 5-year inflation schedule, and all resources are stored in cold storage, unless in particular instances when the portfolio needs to be rebalanced. What makes this investment a lucrative and worthy of the 692.5% increase in funds it registered is its suitability to those investors whose coins are lying somewhere and see Bitwise as an excellent platform to dump them.
The purpose of this fund is to offer those who are skeptical of the cryptocurrency market to get a share of it, albeit passively. However, what a person gets regarding dividends depends on inflation adjustment of the market capitalization, eligibility criteria, rebalancing rules, policies on hard forks among other factors. That is to say; the ten coins are valued concerning the prevailing value.
How the HOLD 10 Fund Works
Instead of owning a single currency, the fund presents each investor the privilege of getting a share of every coin’s win. But ideally, nobody buys or owns a digital token, unlike in the case of ICOs, and instead, each investor buys shares from its basket of digital token.
The fund is designed to allow the investors get as many returns from the cryptocurrency markets as possible. And it is possible, not just because the HOLD 10 index covers 85% of the coins' market, but also because it has the top 10 digital coins. It has Bitcoin, Ethereum, Ripple, Bitcoin Cash, ZCash, Monero, Litecoin, Dash, NEO and Ethereum Classic, and of course, you know how the value of these coins has been skyrocketing.
After a year, Bitwise expects the HOLD 10 fund to have registered 0.70% average daily returns, 4.01% standard of regular return and 3.31 annualized Sharpe ratio. Throughout 2017, Bitcoin gave an average of 0.62% on daily returns and a 2.90 annualized Sharpe ratio. Aside from these projections, however, it is every investor’s interest to know how the fund is profitable.
Share Composition of the Bitwise Investment Fund
- Bitcoin – 61.61%
- Ethereum – 18.92%
- Ripple – 7.15%
- Bitcoin Cash – 3.38%
- Litecoin – 2.59%
- Dash – 1.93%
- ZCash – 1.70%
- Monero – 0.98%
- Ethereum Classic – 0.94%
- NEO – 0.80%
The Long and Short of it – it be the Vanguard of Cryptocurrency
Its team of able developers aside, Bitwise has a couple of high profile investors led by AngelList’s Naval Ravikant, which basically says a lot about how great it’s going to be. Also, being something different from the quintessential ICOs makes it easy for those who know little about how the world of crypto work. It also has the best ten coins by market share, which simply translates to profits, and yes – it is 100% legit!