Crypto Index Funds to Invest: Crypto index funds monitor digital currency baskets, giving investors a diverse cryptocurrency portfolio with a single investment. This article reviews the top 7 crypto index funds in the market.
Crypto index funds track several digital currencies and use different weighting and rebalancing strategies. Therefore, investors can read on to choose the finest crypto index fund for their financial goals and risk tolerance.
No two crypto index funds are alike. Each crypto index fund will hold a weighted basket of digital currencies. Furthermore, market capitalization often determines cryptocurrency selection. This means the crypto index fund will rebalance its benchmark regularly. One crypto index fund will differ from another.
1. Crypto Presales – A Better Alternative to Crypto Index Funds
There are better crypto index fund alternatives. Most crypto index funds invest in large-cap digital currencies. Since the market has been bearish for about 12 months, this has minimal upside potential.
Instead, investors may seek crypto presales for early access to new digital currencies. Additionally, early investors receive a discount compared to the exchange listing. Investors may want to consider Bitcoin ETF Token, a new presale token that raised approximately $500,000 in the first week.
1. Bitcoin ETF Token – Latest Crypto Presale is the Best Alternative to Crypto Index Funds
The Bitcoin ETF Token presale is structured around the SEC’s imminent approval of the Bitcoin ETF. We have chosen it as the top option for crypto index funds because of the high probability of its success upon approval of spot Bitcoin ETFs.
Investors are taking notice because it raised nearly $500,000 in less than a week. The Bitcoin ETF Token presale website is where you may purchase $BTCETF tokens. To access the presale site and pay with ETH, USDT, or a card, you’ll need an Ethereum-based wallet, such as MetaMask. You can also use MATIC and BNB coins to buy $BTCETF but cannot participate in the staking APY.
The presale for the tokens consists of ten stages. Token prices increase slightly with each level, beginning at $0.0050 for the first stage and ending at $0.0068 for the last. Consequently, you could get the most bang for your buck by purchasing the token before its release.
With the staking method, you can increase your chances of earning rewards at every stage of the buying process. The staking APY was over 2,000% during the initial presale phases. However, this amount will decrease, so it’s wise to stake early on, particularly if you intend to purchase the $BTCETF tokens.
In addition to staking, the team will utilize token-burning features to remove up to 25% of the total supply from circulation. Initially, there will be a 5% token burn fee on all transactions, but it will go down to zero after specific milestones are completed about the spot Bitcoin ETF.
Every time a milestone is reached, such as the first Bitcoin spot ETF being approved, the first Bitcoin spot ETF being launched, or all spot Bitcoin ETFs having $1 billion in assets under management, 5% of the overall supply will be removed. To stay updated on the initiative and the Bitcoin spot ETF approval, follow Bitcoin ETF Token on X and join the Bitcoin ETF Token Telegram channel.
2. Bitcoin Minetrix – New Stake-to-Mine Crypto An Alternative to Crypto Index Funds
The new stake-to-mine platform, Bitcoin Minetrix, is an excellent alternative to cryptocurrency index funds. Because regular individuals can earn mining rewards, this proof-of-stake coin has a particular use case.
Since the cloud mining market has been rife with questionable practices that have caused investors to lose money, Bitcoin Minetrix aims to decentralize it. Cloud mining credits are available as ERC-20 tokens through Bitcoin Minetrix’s native token, $BTCMTX.
There is no way to make a copy of these tokens because they are recorded on the blockchain. With an Ethereum-powered smart contract, Bitcoin Minetrix investors can secure their $BTCMTX holdings and begin collecting the tokenized cloud mining credits. Token holders will eventually receive credits from the smart contract.
The staking contract at Bitcoin Minetrix allows you to earn APYs (Annual Percentage Yields) of up to 200% to lock up your assets. You can obtain Bitcoin cloud mining power by burning the generated ERC-20 tokens.
Users can earn mined cryptocurrency and Bitcoin and a portion of the profits from their allocated mining time. As a result, Bitcoin Minetrix lowers the bar to entry for profit through mining operations and provides more transparency through the blockchain.
This new cryptocurrency will have a current presale for 70% of the 4 billion coins. Thirty-nine rounds comprise presale, with 70 million tokens distributed in each round. In the last round, the price of $BTCMTX will rise to $0.0148 from its current $0.0113.
This has resulted in a price hike of almost 30%. Since the presale began, Bitcoin Minetrix has raised over $2.8 million. The target amount to be collected during the presale is above $24 million. Read the Bitcoin Minetrix whitepaper and join the Telegram channel to stay up-to-date on this cryptocurrency project.
3. Bitwise 10 Crypto Index Fund – Weight Index Fund of the Top 10 Cryptos by Market Cap
Bitwise is a leading example of cryptocurrency index funds. As its name implies, the Bitwise 10 Crypto Index Fund follows the market capitalization of the top 10 cryptocurrencies. This indicates that a cryptocurrency’s contribution to the index is directly proportional to its market capitalization. As of this writing, the index fund is 61.5% Bitcoin-based and 29.3% Ethereum-based.
Consequently, over 91% of the total allocation comes from just these two cryptocurrencies. Here, we see another reason crypto index funds aren’t exactly appealing: most money goes into only two digital currencies. The Bitwise 10 Crypto Index Fund does not impose a performance fee. However, it has an expense ratio of 2.5%. It would be more cost-effective to purchase the corresponding coins straight from an exchange; this option is costly.
Under its ticker name BITW, this cryptocurrency index fund manages assets worth approximately $400 million. The Bitwise 10 Crypto Index Fund began trading in December 2020 and has since produced returns of 93.35 percent. Unfortunately, the fund is down 70% when looking at it over 12 months. Last but not least, this crypto index fund undergoes monthly rebalancing. This keeps the fund in step with the market as a whole.
4. Galaxy Crypto Index Fund – Invest in 12 Different Cryptocurrencies With Monthly Rebalancing
The Galaxy Crypto Index Fund is the next investment on our list. This fund aims to maintain a level of matching performance with the Bloomberg Galaxy Crypto Index. Twelve digital currencies are included in this crypto index fund, with market capitalization serving as the primary metric for weighting.
So, Bitcoin and Ethereum take up a disproportionate amount of the portfolio’s weight. In contrast to the Bitwise crypto index fund, Galaxy limits the weighting to no more than 35% per coin. This indicates that the combined weight of Bitcoin and Ethereum is 70%.
The rest of the portfolio comprises Cardano, Solana, Avalanche, Polkadot, Cosmos, Litecoin, Chainlink, Uniswap, and Algorand. One of the oldest alternatives in this market, the Galaxy Crypto Index Fund, was incepted in August 2017 under the ticker symbol BGCI.
6. Nasdaq Crypto Index Fund – Diversified Basket of Market Cap Weighted Cryptocurrencies
One popular alternative for individuals looking for controlled diversification with a single investment is the Nasdaq Crypto Index Fund, established in 2020. Throughout 11 projects, Nasdaq has focused on the top cryptocurrencies—Crypto Index Funds to Invest. There should be two verified exchanges for every digital currency that is being monitored.
This cryptocurrency index fund is rebalanced every three months and is weighted according to market capitalization. As of this writing, the portfolio is almost entirely comprised of Bitcoin (at 69% weight) and Ethereum (27% weight), making up nearly 97% of the total.
This leaves barely 3% for the other nine coins. This category includes Litecoin, Polkadot, Chainlink, Bitcoin Cash, Stellar Lumens, Uniswap, Axie Infinity, Filecoin, and the Sandbox.
6. Fidelity Crypto Industry and Digital Payments Index – Diversified Portfolio of Crypto-Centric Stocks
Investors who prefer to invest in stocks rather than digital currencies directly may be interested in this Fidelity cryptocurrency index fund—Crypto Index Funds to Invest. The fund’s focus summarizes that it only invests in companies involved with blockchain technology and cryptocurrencies.
Block and Coinbase are this portfolio’s two most significant holdings, with a combined stake of 17.2% and 10.7%, respectively. Other members are Bit Digital, Bitfarms, Hut 8 Mining, Bakkt Holdings, Cleanspark, and Riot Blockchain.
The last year has been brutal for a few of the equities in this cryptocurrency index fund. Consider the steep 95% and 92% decline in Bakkt and Bit Digital, respectively. At a pitiful 0.39%, the Fidelity Crypto Industry and Digital Payments Index is incredibly frugal.
7. Bitwise DeFi Crypto Index Fund – Invest in the Future of Decentralized Finance
This year, Bitwise is again among the top crypto index funds. This time, we’ll discuss the Bitwise DeFi Crypto Index Fund, an investment vehicle that tracks the expansion of decentralized financial systems. The fund has ten major DeFi initiatives, each with its weight.
Nevertheless, Uniswap accounts for slightly more than 55% of the fund’s weight. Maker contributes 7.9% and Uniswap 11.9%. Curve, Lido DAO, Compound, Loopring, Yearn. Finance and 0x make up the rest of this cryptocurrency index fund.
The expense ratio is 2.50%, much like the other Bitwise crypto index fund we talked about before. In addition, $25,000 is the minimum you need to put into this cryptocurrency index fund. The Bitwise DeFi Crypto Index Fund has lost 81% of its value since it started in February 2021.
What are Crypto Index Funds?
The purpose of crypto index funds is to provide diverse exposure to the digital asset market. Crypto Index Funds to Invest: The basic idea behind index funds is that investors can gain exposure to digital assets with only one move rather than buying and selling individual cryptocurrencies on an exchange.
One significant advantage is that investors can taste the digital asset market by purchasing the top crypto index funds. This market is home to over a dozen crypto index funds, eight of which have been covered here. Diverse crypto index funds will pursue different objectives.
Some index funds, for instance, aim to invest in the ten most valuable cryptocurrencies as of a specific date. Others, like DeFi, may zero in on a particular subset of the cryptocurrency market. The weighting system is the most essential criterion when selecting the best cryptocurrency index fund. This is the proportion of the index’s total value that each cryptocurrency made up.
Most crypto index funds prioritize assets according to market capitalization, a significant concern in this area. So, it’s common for Bitcoin and Ethereum to make up most of the portfolio. These two cryptocurrencies account for almost 90% of the total portfolio weight for some funds we’ve discussed today.
Consequently, there isn’t much diversification for investors. The investor is doing the opposite, putting almost all of their money into Bitcoin and Ethereum and scattering the rest across other cryptocurrencies. In addition, expense ratios can be pretty pricey; for example, Bitwise charges 2.5% per year.
Why Invest in Crypto Index Funds?
Is the idea of crypto index funds still foreign to you? Still, considering what cryptocurrency exchange-traded funds (ETFs) to invest in 2024? Some of the most important things to think about before moving further will be covered in this section.
Diversification
Instant diversification is a significant selling point for crypto index funds, which is why some investors choose them. As discussed throughout this book, index funds follow a diversified portfolio of digital assets. This allows investors to get exposure to all cryptocurrencies with just one investment. Many cryptocurrency index funds put a disproportionate amount of money into Bitcoin and Ethereum, a significant problem. Because of this, the portfolio’s diversification will be severely lacking.
Passive
Adding to the list of advantages is that investing in crypto index funds requires zero active participation. Following the first investment, the provider’s algorithms and goals will determine how the crypto index fund is automatically rebalanced and weighted. Some cryptocurrency index funds, for instance, adjust their holdings every month. The proportions allocated to each cryptocurrency will often be adjusted in this way.
The percentage will be adjusted upwards for cryptocurrencies with significantly larger market capitalizations than the previous month. Therefore, a smaller share will be awarded if the cryptocurrency’s value has decreased.
A new cryptocurrency asset could also be added to the index fund during rebalancing. For example, considering the fund’s holdings in terms of market value, let’s say Solana is the tenth. The crypto index fund will likely swap if Polygon takes up Solana’s position at number ten the following month.
Traditional Investment Process
Most crypto index funds cater to investors more accustomed to conventional investment vehicles, such as equities and exchange-traded funds (ETFs). Many investors are wary of utilizing cryptocurrency exchanges following many hacking scandals.
Another concern for investors new to the market is finding a secure place to store their cryptocurrency holdings, such as a private wallet. Alternatively, investors might use more conventional means of allocating capital by selecting a crypto index fund. All you have to do is use an SEC-regulated brokerage to buy shares in the fund from a trustworthy exchange-traded fund (ETF) provider.
Crypto Presales vs Crypto Index Funds – Which is Best?
Crypto Index Funds to Invest: Investing in crypto index funds can be good when market sentiment is positive. After all, most cryptocurrency markets, particularly those for large-cap currencies, tend to follow the market trend. So, the other top ten cryptocurrencies also benefit from Bitcoin’s success.
Nevertheless, a bear market has gripped cryptocurrency for about twelve months. Because of this, the value of most cryptocurrencies has dropped by 70% or more from their all-time highs.
Investors in crypto index funds are thus losing a lot of money. On the other hand, several cryptocurrency presales have achieved previously unseen levels of success despite the present market downturn. Just two examples from 2022 are Lucky Block and Tamadoge. Lucky Block achieved 60x growth after its presale, and Tamadoge created 20x growth. Bitcoin ETF Token is currently the top initial coin offering (ICO). Tokenized cloud mining credits and large staking payouts are features of this cryptocurrency.
Conclusion
First, crypto index funds make it easy for one trader to own various digital assets in one place. The top cryptocurrency index funds even handle portfolio rebalancing and reweighting for their clients. Nevertheless, crypto index funds are also producing substantial losses, similar to the bear market. Crypto presales, such as Bitcoin ETF Tokens, provide an excellent substitute due to the high yield offered by its high-stakes APY in the first stages of the sale. The native token, $BTCETF, sells for $0.0052 a token during the presale.
