Investing in cryptocurrencies requires a lot of time and effort to turn out profitable. This can be troublesome (or even impossible) for the majority of individual investors or crypto start-ups. Crypto funds provide a great solution for both. Keep reading and find out why.
Who (currently) drives the market?
The crypto market continues to be driven primarily by retail investors. This is true mostly due to the fact that, in most countries, the crypto ecosystem is still unregulated. Whereas when it comes to institutional money, the pension funds, mutual funds, insurance companies, and other traditional financial companies that hold “the big bucks” are subject to much stricter rules regarding which investments they can expose their clients’ assets to.
That being said, we will likely not see “the big bucks” being moved from the traditional markets to the crypto market until firm rules and clear guidelines are put in place by the regulators. Still, this is not to say that a strong demand from the institutional companies to invest in crypto does not exist. Here are some interesting highlights from a report, published by one of the largest asset management companies in the world, Fidelity, illustrating institutions’ scope of interest in digital assets:
- about 22% of institutional investors already have some sort of exposure to digital assets;
- 47% of all institutional investors surveyed perceive digital assets as a potential investment for their portfolios;
- around 40% of institutional investors claim to be open to future digital investments in the next five years.
In the future, institutional money will undoubtedly play a considerable role in the evolvement of the crypto market. Yet, until these investors truly take root in the new asset class, the crypto market will still be run by retail investors. And it is these average investors who will remain exposed to all the risks of the unregulated market.
Now, the obvious question follows: how should an average person invest then, without being too vulnerable to these risks?
Can an average (retail) person invest on their own?
Sure, they can! It might come with a price though! An average, non-professional investor is quite susceptible to making some of the most common investing mistakes that can result in lower profits or – in a worst-case scenario – a loss of their entire investment. To recap a few of these from my previous article:
- not accounting for trading fees;
- not diversifying their portfolios;
- lacking the time to properly analyze the market or the assets;
- losing assets while transferring from an exchange to cold storage or vice versa.
From my standpoint as a full-time portfolio manager, I’d definitely agree that an average investor – without an investing strategy and focus, time or effort to execute it – will likely conduct these costly mistakes and inevitably underperform the market.
How not to invest in mistakes?
Many investors opt for HODLing which has become a very popular investing method in the crypto community. HODLing, however, allows investors to only follow the market trend, without any regard to minimizing losses or maximizing gains.
An alternative solution would be to take away the burden of investing by yourself altogether and rather leave the asset management job to the professionals. Nowadays, the new technology enables financial experts to set up and manage crypto funds. Crypto funds are an investment solution, professionally managed by companies with years of experience and a proven track record where teams of portfolio managers and analysts backtest and apply structured investment strategies to combat the bull and the bear markets, and systematically monitor the investment’s performance.
Investing in a crypto fund saves your time and effort, so that you can focus on what really matters in your life. Furthermore, it takes you beyond investing merely in Bitcoin, Ethereum, or Binance Coin; instead, your portfolio is diversified into 20 or more carefully selected cryptocurrencies and actively managed. Also, you can rest assured that your assets are stored in the safest available vaults, while your asset manager sends you elaborate monthly reports about your investment performance.
We have recently introduced Solidum Actio and Solidum Cautus Crypto Funds. These are our two exclusive investment strategies, previously offered only to our corporate clients, now made available to all investors. You choose the one that fits your risk profile, enter either crypto fund with as little as 10 USD, change between them, and withdraw your funds at any time.
What about crypto startups as investors?
Many crypto startups (ICOs, IEOs, STOs, etc.) have raised a lot of funds during their crowd fundings and are now focusing on developing their products and services. However, many of these projects suffer from a common problem: the capital that they had raised during their crowdfunding is not operational and is just sitting in a digital wallet. This is not efficient, nor is it a good business move.
Solidum Capital provides individual portfolio management for crypto startups, providing these emerging businesses with an opportunity to:
- gain additional funding by investing in the crypto market and
- enjoy the freedom to focus on their projects, without spending time and effort on managing their own investments.
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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.
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