An Easy Entry Point For New Investors

One of the primary barriers to cryptocurrency is how difficult it is to buy coins through exchanges. I’ve registered for several exchanges myself and have found it to be a frustrating process at times: Is the exchange trustworthy? How long do I have to wait to get verified? Will my bank transfer go through? Why doesn’t their customer support get back to me?

Crypto Asset Managed Funds may be one of the answers to this problem by allowing new investors to track multiple coins from one platform as well as hedge against significant losses with a diverse portfolio.

What are Crypto Asset Managed Funds(CAMF)?

Crypto Asset Managed Funds pool money from a group of people to buy larger amount of coins to yield larger profits. Instead of having to register through 3 different exchanges, you simply log-in into a CAMF platform. On these platforms, you’ll be able to choose among different baskets (or pre-chosen cryptoportfolios) to invest in. Some CAMFs even have plans to allow experienced traders to create their own baskets in the near future.

One disadvantage of a CAMF is that the fees are higher than if you were to buy them directly off an exchange. However, this is well worth the cost when you consider the amount of stress and waiting a new investor might have to endure in order to buy the coins they want. Also, having a diversified portfolio will give them exposure to the market while mitigating losses.

What Kind of CAMFs Are There?

Managed Funds can be broadly split into 2 categories: active management and passive management.

Actively Managed Funds

These types of funds are managed by traders who seek to “beat the market.” They actively trade in an attempt to “buy high and sell low” according to perceived market trends. Some are highly profitable, most are not.

Passively Managed Funds

These types of managed funds create portfolios based on proven market trends called an index. The philosophy behind Passive Management is the Efficient Market Hypothesis. It states:

“Stocks always trade at their fair value on exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be impossible to outperform the overall market through expert stock selection or market timing, and the only way an investor can possibly obtain higher returns is by purchasing riskier investments.” http://www.investopedia.com/terms/e/efficientmarkethypothesis.asp

The goal of these funds are to invest in low-risk and low-cost portfolios. However, Passively Managed Funds are not simply a “buy and hold” approach. They also make trades in order to readjust the ratios in their baskets to remove poorly performing coins. However, this occurs less frequently than actively managed funds. The potential gains of a passively managed fund are not as extravagant as successful actively managed fun. However, its growth is consistent.

Are There Any CAMFs Right Now?

PC: Thanks to the moderators of www.reddit.com/iconomi

Iconomi is a Slovenia based company that raised $10 million in its ICO for the token ICN. 60% of those funds have been set aside for company use and development while 40% of that has been used to seed their first Digital Asset Array (DAA), or basket. In the Q2 of 2017, this DAA increased 402.4% with their entire book value at $108,549,800.00. How ICN holders will benefit from this performance is addressed here: https://iconomi.zendesk.com/hc/en-us/articles/115002851065-ICN-token

Their website is currently open for registration and will allow access to the Columbus Capital Blockchain Index (BLX), Columbus Capital Pinta (CCP), and Columbus Capital Blockchain.ONE.

BLX is a passively managed index fund, CCP is an actively managed fund, and Blockchain.ONE is a passively managed fund based on Blockchian Index investment strategy and will be listed on the traditional internationally regulated exchanges.

PC: Thanks to the moderators of www.reddit.com/peercoin

Indicium(IND) is another Crypto Asset Management Fund that is currently in development. Indicium sets itself apart from other CAMFs in that it seeks to be an attribute-weighted index fund. This means it will be passively managed and use a specialized strategy in order to outperform traditional index funds. For its first index, the attribute will be a proprietary measure that will focus on stability. Future indexes may have a more aggressive approach.

Another unique characteristic of Indicum is that it will use robots to manage their funds. Indicium will create programs, or oracles, that follow pre-set rules that reflect each index’s unique attribute to trade on exchanges. This is a significant departure from Actively Managed Funds that are traded by humans. For more information, please refer to Peercoin Pulse’s article here.

Indicium has already gone through Series A of fundraising and will be slated to go through Series B in the future through the Peer Assets protocol built off of Peercoin.

PC: Thanks to prism.exchange

Would you rather create your own baskets without handing over your fiat or coins to a third party like Iconomi or Indicium? Prism, the world’s first trustless asset portfolio platform, may be for you.

Back in May 23 at the blockchain summit Consensus 2017, Shapeshift made waves across the cryptocommunity by announcing Prism. This platform allows investors to create their own portfolios, or what they call prisms, through ethereum smart contracts.

In order to do this, first you’d submit an ethereum address to Prism and then send ETH to it as collateral. You would then select coins to create your own personalized cryptoportfolio. However, you can only select as many coins as the value of ETH you initially provided. To cash out, you would simply close your prism and pay a fee. You can read more about the specific process here. Also, it is noteworthy to mention that this platform will be available with Bitcoin as well as soon as RSK is implemented.

Prism is currently in a closed beta which you can register for here.