Cryptocurrency may be one of the most widely discussed topics of our times. It is arguably the hottest asset class right now and investors have made cryptocurrencies some of the most promising investments out there. You can find dozens of articles discussing the prospects of cryptocurrencies and their potential upside in just about any news outlet you visit.
However, in this article we will take a look of the most promising funds to benefit from the rise of crypto. These funds are not only active in crypto, they also focus on digital assets in general and have done fairly well in the past.
1. Sprott Global cryptocurrencies fund (SPDR)
Sprott Global cryptocurrencies (formerly named Sprott Physical Cryptocurrency Trust (PKC)) is a leveraged cryptocurrency ETF which is designed to offer exposure to a diversified portfolio of investment tokens and coins. The fund’s holdings are primarily BTC and ETH with a low percentage of the portfolio allocated to other digital currencies. The fund seeks to achieve capital appreciation by investing primarily in digital currencies, including BTC and ETH, bitcoin futures contracts, bitcoin and blockchain-related companies, and digital tokens and initial coin offerings.
The primary investment objective of the Fund is to seek to replicate as closely as possible, before fees and expenses, the price appreciation in the value of an investment in the underlying digital currencies. As of March 2018, the ETF had total assets of $373 million, of which 59.33% (or $251.2 million) was allocated to BTC, 32.93% (or $125.6 million) to ETH and 12.79% (or $36.4 million) to other coins/tokens. The fees charged by the ETF are on a yearly basis of 0.75%. And if you want to get insight info about Galaxy Digital Portfolio, you can click here.
2. Grayscale blockchain and bitcoin trust (GBTC)
Grayscale blockchain and bitcoin trust is the world’s most popular and oldest publicly-traded bitcoin trust. The fund’s assets, as of March 2018, were $1.3 billion and the average daily trading volume was $200 million. According to Grayscale, the fund’s investment objective is to seek a total return through investment in bitcoin and blockchain-related companies, digital assets and initial coin offerings.
The fund seeks to achieve this by investing in publicly-traded companies that, in the fund’s opinion, are developing the fundamental technologies behind blockchain technology, or have experienced accelerating revenue growth and innovation in their blockchain-related business practices. The fund also invests in blockchain and bitcoin companies that Grayscale believes are at an attractive valuation. The ETF’s holdings are almost exclusively BTC with smaller percentage of ETH and other digital currencies. The minimum investment is $5,000. Fees for buying and selling vary depending on the size of the ETF.
3. Virtu Financial (VIRT)
Virtu Financial is an electronic market maker, which specializes in executing buy and sell orders for digital assets. They help participants lower fees and improve the execution of bitcoin contracts. With $18.2 billion of assets under management as of December 2017, the company also owns the Chicago Board Options Exchange (CBOE), KCG Holdings, Inc. and several other bitcoin exchanges. The company launched the cryptocurrency fund through Fidelity Investments, in partnership with VelocityShares. The fund has seen a fast pace of appreciation with a peak of over $8 billion of total assets after about four months of trading. You should get into alameda research portfolio in order to be successful in crypto world.
3. Virtu Financial (VIRT)
Virtu Financial is an electronic market maker, which specializes in executing buy and sell orders for digital assets. They help participants lower fees and improve the execution of bitcoin contracts. With $18.2 billion of assets under management as of December 2017, the company also owns the Chicago Board Options Exchange (CBOE), KCG Holdings, Inc. and several other bitcoin exchanges. The company launched the cryptocurrency fund through Fidelity Investments on Dec. 4, 2017, in partnership with VelocityShares. The fund has seen a fast pace of appreciation with a peak of over $8 billion of total assets after about four months of trading.
4. SolidX (SOX)
SolidX is a bitcoin trading platform that facilitates private and public spot trades in bitcoin and other digital currencies. They partner with market makers to provide liquidity and transaction clearing for bitcoin. SolidX’s main focus is on providing liquidity for the $100 billion global bitcoin market. The company has a focus on the institutional markets, brokerage and custody solutions, and on providing end-to-end solutions and services for institutional clients. The SolidX Cryptocurrency Fund began trading in early days and you can benefit from Paradigm portfolio.
5. North Star
North Star is a blockchain exchange that supports a range of cryptocurrency trading options including futures, forward contracts, cash-settled futures and a single-chain exchange with trading pairs for bitcoin and ether. North Star operates in 30 different countries and has executed more than 100,000 bitcoin futures trades. It has also integrated a suite of digital asset exchange services with live trading and instant order matching capabilities. North Star has raised $80 million from leading venture capital funds like Index Ventures, Union Square Ventures, NEA, and Ribbit Capital.
6. TeraExchange (TER)
TeraExchange is an international cryptocurrency derivatives exchange and clearing house registered with the US Commodity Futures Trading Commission (CFTC) and regulated by the Swiss Financial Market Supervisory Authority (FINMA). It offers a fully integrated suite of trading and clearing services to users in North America, Europe and the Asia Pacific region, and allows customers to trade all major digital assets. According to the company, the TERX fund is the first ETF to be specifically created for digital assets and launched by an independent exchange. It looks like A16Z Crypto Fund but it’s different.
Conclusion
The cryptocurrency funds are a novel way for people to invest in this emerging digital currency space. There are hundreds of crypto-firms worldwide that have provided cryptocurrencies, distributed ledger technology (DLT) and blockchain technologies. These companies are looking for investments to help grow their business. Crypto funds are also providing an opportunity for investors to benefit from the price appreciation of the cryptocurrencies. However, as these funds increase in popularity, liquidity may become an issue. The only way to mitigate the risk is to diversify between multiple funds.