Are there altcoin index funds

The best crypto funds for retail investors

In summary: variants of crypto funds for private investors

There are three types of crypto funds for private investors.

Provider manages fundsBundled purchase of cryptocurrenciesPortfolio you put together yourself
Example: Crypto 10 Index

advantages
  • automatic rebalancing
  • no technical know-how required
  • Comparable to funds

disadvantage

  • Higher fees
  • no own coins
Example: Bitpanda Crypto Index

advantages
  • You buy actual cryptocurrencies
  • Fees lower

disadvantage


advantages
  • Own weighting possible
  • Easiest for tax purposes

  • disadvantage
    • No rebalancing
    • more elaborate

Crypto funds that the provider manages

These types of bundles are most similar to funds. Customers purchase them as a closed package via the respective platform with an entry fee and manage them there. In most cases, new owners receive a token as confirmation of purchase, which can, but does not have to be, freely tradable.

Analyzes in the account show which profits and losses the bundle has made. Most of the payments are made in fiat currency.

The provider holds the fund of cryptocurrencies for the customer in hot and cold storage wallets (including rebalancing). Service or portfolio management fees apply for this. A sale is possible, either back to the platform, or in the form of a resale to other customers. Usually customers pay an exit fee.

The individual crypto currencies are therefore not transferable, for example into your own wallets. The responsibility for safe storage lies exclusively with the provider. The customer has to trust his expertise. In the last few years in particular, providers have built up expertise and expanded the proportion of “cold” storage.

Bundled purchase of cryptocurrencies as a crypto index

The only purpose of bundling in this variant is to reduce the cost of buying multiple cryptocurrencies. Once the purchase has taken place, owners sometimes even keep the currencies in their individual wallets with the respective provider. This is not the case with the Bitpanda Crypto Index, here the provider keeps the coins in the background.

This form comes mainly from stock exchanges. Attention: In addition to the bundling for private investors, there is often a professional version. For example, Coinbase offers Bundle (private) and Custody (institutional).

The major disadvantage of bundling purchases is the lack of customization. Previous offers specify the crypto currencies in the bundles and do not allow buyers to put them together personally.

Portfolio you have put together yourself

Private investors who want to keep control of their currencies and set individual priorities can put together their own portfolio.

Because the easiest way to spread risk is through self-initiative. The basic idea of ​​cryptocurrencies is the own and thus independent management of the assets held. If you take care of yourself, you don't need a bank - or, as in this case, no third-party providers. In addition, you save management fees.

However, owners need a certain amount of experience in order to be able to act in a bank-like manner. For beginners and advanced learners, it is worth considering which approach is best for them.

Which currencies come into question and, above all, in which weighting, depends on the individual situation. The providers mentioned above certainly give a good basic orientation. However, it is important to inform yourself - whether you are a beginner or an expert - about:

  • the characteristics of the individual coins
  • the associated potential
  • the purchase and sale costs of the stock exchanges
  • the tradability of coins and tokens
  • correct and safe storage
  • the best time to consider and possibly restructure your own portfolio