How do you invest in cryptocurrency funds?
Updated: Sep 14, 2021
While the crypto market is highly volatile and high risk, the potential gains on offer make it an attractive proposition for many people.
As interest continues to rise in Bitcoin and other altcoins, such as ethereum, chainlink and Polkadot, the potential upside of investing in cryptocurrencies grows too.
Right now can be an ideal time for individuals who want to enter the market and put their money in cryptocurrency, especially if they hold a long term horizon for their investment.
Having said that, if you are among those users and want to invest in cryptocurrency, here is how to invest in cryptocurrency funds.
What is a Cryptocurrency Fund?
A cryptocurrency fund is an investment fund that focuses solely on cryptocurrencies. The fund manager offers to invest and trade in cryptocurrencies and manage the fund on behalf of investors.
By trusting your money to a cryptocurrency fund manager, you are looking to earn more than you could in the stock market or by investing in cryptocurrencies yourself.
The responsibility of the investment manager includes:
building up a client’s investment capital competently,
searching for potential growth opportunities;
managing investment strategies;
investment and project analysis;
cryptocurrency risk assessment.
How do cryptocurrency funds work?
The primary aim of a cryptocurrency fund is to create profits for the investors. Some crypto funds will have their own targets - for example, we aim to return more than Bitcoin alone - and it should be explicit as to what the fund aim is before you consider investing.
Cryptocurrency funds work in the same way as regular investment funds do - by pooling investors' money and holding assets on their behalf with the aim of creating profits for the investors.
Although each crypto fund has its own strategy for working with investors, funds from investors are typically distributed in three categories:
Purchasing viable tokens of trustworthy and profitable cryptocurrencies.
Purchasing viable altcoins.
Investing in cryptocurrencies that the fund believes are undervalued.
In practise, the funds typically select one or two promising projects and invest the majority of the investors' funds in them.
Furthermore, they seek out newly viable (as well as old underappreciated) crypto projects in which to invest the remaining funds.
First Find A Reliable Crypto Fund Platform
The first thing to consider when choosing a crypto fund is whether the platform it uses is trustworthy.
For example, we use ICONOMI as our platform for our DeFi Infrastructure Fund as ICONOMI are audited every quarter by Deloitte (one of the biggest accountancy firms in the world). This way, we can be assured that ICONOMI look after your funds correctly.
Open An Account
The platform will ask for your identity proof and address documents as per their policies and the amount you want to invest in the market. Then the platform will verify the documents, and all this is done to ensure your safety and prevent fraud.
To invest in our fund, you will need to deposit funds in your account. ICONOMI uses the Skrill app to complete transactions.
To do this, you can link your bank account with your crypto account via 'Skrill' app and deposit the money through a wire transfer.
These wire transfers are automatically denominated in Euros. If your national fiat currency is different, (like GBP) Skrill will automatically convert the amount of your local currency to Euros for you.
Make Your First Purchase
Once you have money in the account and are all set to invest,
Cryptocurrency Storage Method
ICONOMI platform stores all your cryptocurrencies for you. It has military grade security for custody of your investment and has never been hacked, so you can feel safe investing with us via their platform.
Investing in Crypto Funds is a hedge against the future
You've no doubt read a hundred or more in mainstream media that bitcoin has died or that cryptocurrencies are a fad.
But many of the top minds focused on finance and technology agree that cryptocurrencies are where the financial system is heading. Investing now could be the equivalent of investing in Amazon or Google in the mid-to-late nineties.
As fund managers, it is our job to pick the best cryptocurrencies for you to invest in and make sure that you earn a great return for the risk that you're taking. Investing with us gives you the advantage of having experts taking care of your money and thus meaning you don't have to analyse the market 24/7 and react if there is news threatening your portfolio.