If you are not ready to understand the charts of growth and fall of the cryptocurrencies, don’t want to track the red flags of the ICOs, and also you do not have time for online courses, there is also an alternative solution – to entrust your assets to trained experts who will multiply them for you. Crypto funds can be a good decision. Unfortunately, you’ll still have to find a trustworthy cryptofund and understand what type suits you better.
A cryptofund is basically a fund that can manage your investments and you won’t need to choose which coin or token to support – market experts will do that for you.
Types of funds
There are several types of such funds:
Crypto hedge funds are the most well-known and largely advertised form of crypto funds. Hedge fund offers customers quite a convenient investment options. Like fiat hedge funds, they promise less risk than independent investment with huge profit. Investors are required to pay a managing fee.
There are two characteristics that distinguish hedge funds from other types of funds:
- Lockups. Hedge funds often generate returns after holding your money for a determined period of time called “lockup period”. Your funds won’t be unlocked earlier and you won’t be able to quite until lockup is over.
- 20% Returns. Hedge fund managers receive a percentage of returns they earn for investors. Traditional ratio would be 2/20, 2% of the fund covers management fees (salaries, operations) and 20% of the returns go to the fund managers before an investor sees a result.
Some of reliable hedge funds:
Crypto mutual funds are for investors who are ready to pool their funds into joint capital. In return, they get a share in this fund (usually in the form of “tokens”). These funds serve as a wonderful option for startup traders who want to grow their digital assets.
Popular mutual funds are:
Cryptocurrency index funds are quite similar to fiat index funds and allow new investors to enter the crypto stock market.
If you’re interested in this type of crypto funds, you can check:
Cryptocurrency investment fund is a platform where investors can capitalize all their funds so as to get benefits of a team effort. In these funds you can either avail market advantages or support the mining machinery. Such funds are mostly associated with higher risks and higher profit.
Some popular crypto investment funds include:
Although the first thing you hear, is that crypto investment is a highly risky idea, there are several advantages that may convince you to do it.
- It’s an investment with highest profit margins.
- Crypto transaction fees are becoming lower with development of mining technology, more people are using crypto, more profit you can get.
- Crypto funds offer higher profit margins (though with higher risks). That is how you can earn more money by investing in such funds.
What budget will you need?
Most of the funds will require minimum of $100 000 investment and their commission will variate from 15% to 30%. Moreover, an investor who joins a portfolio must not only pay the crypto fund commission but also the platform fee whose services the investor makes use of.
But you can also find more democratic funds with 0,1 BTC minimum investment or even with $1.
- The main advantage is the diversification of risks, the engagement of professionals who manage the fund, no need to waste time analyzing markets.
- A serious plus of crypto funds is that their experts will create for you a balanced portfolio, with lower risks and reliable income.
- Another advantage of the funds is that they can buy out the ICO package offers at a lower price at the stage of presale.
- It’s still a high risk investment
- Most popular funds will set a high minimum budget (starting from $10 000)
- You still need to analyze funds market and choose the right one
Investing through crypto funds is a serious matter. Reputable crypto funds set a high entry threshold, which will suit those who really consider blockchain as a serious sphere of investment. Therefore, if your budget is below $10 000, it is better to make a research for yourself and invest in a particular cryptocurrency through popular and respected crypto exchanges.
On the other hand, investing through a fund, you give money to the hands of experienced market experts, whose opinions can be relied upon.
Thus, if you are really ready to make a serious investment, but you do not have time to develop a portfolio, crypto funds are the most convenient solution for you.