one token to buy them all
there are too many crypto assets to choose from in the market, here’s how you make the right bet.
when making investment decisions, it’s always difficult to pick and choose the right assets. the ones that will turn out to be fruitful investments against the ones that will be duds. to solve this predicament, John C Bogle, the father of index funds, had suggested that one should not look for the needle in the haystack. instead, one should simply just buy the whole haystack.
the idea has proven itself over the decades and now we have such passive products in all kinds of securities. recently, the trend seems to be picking up for crypto assets as well.
while everything started with Bitcoin, the world’s first cryptocurrency, in 2009, the entire space now has evolved into an entirely new asset class where different tokens have different value propositions. as of today, there are more than 17,000 crypto tokens available in the market as per Coinmarketcap. it’s a crowded place now which is hard to navigate for anyone.
while everything started with Bitcoin, the world’s first cryptocurrency, in 2009, the entire space now has evolved into an entirely new asset class where different tokens have different value propositions. as of today, there are more than 17,000 crypto tokens available in the market as per Coinmarketcap. it’s a crowded place now which is hard to navigate for anyone.
crypto Index investment
like how we have the S&P 500 index fund, which gives exposure to the broader equity market, there is the Total Crypto Market Cap or TCAP index token. it allows investors to profit from the growth of the entire crypto market capitalization.
then there are also index tokens that have a more concentrated approach. the CRYPTO20 index tracks the performance of the top 20 crypto assets by market cap. one can invest in the scheme by buying their C20 token and currently, the fund value stands at around $67 million.
the last two years have also seen an exponential rise in popularity and use of decentralized finance (Defi) products but the nascent space has also proven to be a sweet spot for hackers to exploit. to have a comparatively less-riskier exposure to the Defi space, one can opt for the Defi Pulse Index, which tracks and invests in Defi tokens. right now, it has a market cap of $88.3 million.
index funds have long been considered a comparatively less-risky and cost-efficient product to invest in from a long-term perspective. much like the traditional financial market, where index funds helped one to buy the whole haystack, similar products are becoming popular in the crypto space, where a single token gives exposure to a huge underlying bunch of crypto tokens.