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Are there cryptocurrency index funds?


Jane Goodwin

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If you’re ready to start trading the cryptocurrency market, a cryptocurrency index fund might be the best way to go. Index funds are massively popular, with some $15 trillion flowing into the three largest indexers alone (State Street, Vanguard, and BlackRock). With the growing interest in crypto, it was only a matter of time before crypto index funds were launched. On the stock market, an index is a hypothetical portfolio based on metrics and parameters such as market cap, price, or performance. An index fund is a typically passively managed basket of assets that seeks to mimic the performance of the underlying index. The index concept lends itself well to crypto, where financial information is public and transparent on the blockchain. Over the past two years, several crypto-based indices have cropped up, most notably the BB Index, which offers diversified exposure to the crypto market, and the Bloomberg Galaxy Crypto Index (BGCI), which tracks performance of the largest cryptocurrencies. As of March 2018, the NASDAQ exchange announced two new crypto indices, the BLX, which tracks real-time spot prices for Bitcoin, and ELX, which tracks Ethereum. Most market watchers believe this will open the door to SEC approval of cryptocurrency ETFs in the near future. Some of the most notable cryptocurrency index fund companies include: Bitwise, which pioneered the first crypto index fund. Its Bitwise HOLD 10 Private Index Fund holds the top 10 cryptocurrencies and requires a minimum investment of $25,000. CRYPTO20, is a tokenized fund, in which each token represents a share in a basket of 20 market-cap weighted cryptocurrencies. Bittwenty was released in 2016 as a vehicle for retail investors to trade in crypto. The fund is available on the Bitshares exchange. Investors with at least $100,000 on deposit can apply to buy shares in the Crescent 20 Private Index Fund; its portfolio represents about 90% of the available crypto market. The Coinbase Index Fund sits at the top of the list, but it requires a $250,000 minimum investment and at least $1 million in provable assets.
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