In short:
- Passive investing in crypto is on the rise with the launch of the $AMKT, a market index fund.
- Index investing eliminates the risk of picking the wrong coin and offers several benefits such as rebalancing, lower fees, and taxes.
- The $AMKT tracks the top 25 tokens and is managed passively, making it a convenient option for long-term investment.
Passive investing has been on the rise for the last 50 years, with index investing now representing as much as 30% of the US equity market. But in the world of cryptocurrency, “investing” is often replaced by “trading,” and long-term plans aren’t as common. That was until now.
The Alongside team has created $AMKT, the Alongside Crypto Market Index, which is a passively managed fund that tracks the performance of 25 different crypto assets to give a picture of the whole crypto market.
Let’s look at why index investing will become more popular in crypto, how $AMKT works, and why it will be a key part of bringing the next billion people into the crypto space.
Index Investing Could Help Onboard the Next Billion Crypto Participants
History has shown that it’s nearly impossible to pick the right stock in a rapidly growing industry. For example, in the early 20th century, there were hundreds of automobile companies, but today only three dominate the market in America. Similarly, the internet boom of the late 1990s saw over 5,500 companies go public, but most failed. The same can be said for the current crypto market, which has over 12,000 assets, making it challenging to pick the winners.
This is where index funds and passive investing come in. Passive investing eliminates the risk of backing the wrong horse by investing in the crypto market as a whole instead of betting on specific coins. Index funds also have several benefits, including:
- Rebalancing to track the market
- Lower fees and taxes
- Easy investment in a category instead of individual coins
The $AMKT works by holding the current top 25 tokens and rebalancing monthly to ensure proportional allocation to the market. By investing in $AMKT, you don’t have to actively manage your portfolio or keep a close eye on charts.
The method is passive and non-discretionary. When decisions need to be made, they are made by a DAO of AMKT holders.
Can’t I Just Do This Myself?
It is possible to manage a wide range of cryptocurrencies, but it takes a lot of work. You would need wallets for each of the 25 assets, trade them monthly to keep up with market cap changes, pay fees for each trade, and be constantly monitoring the market.
In conclusion, index investing in crypto is a good way to invest for the long term because it lets you invest in the crypto market as a whole without having to worry about picking winners. With the launch of $AMKT, investors now have an easy-to-use and passive investment option that doesn’t need to be constantly managed and watched.
The Usual Questions
What is a crypto index fund?
A crypto index fund is a type of investment vehicle that tracks the performance of a group of cryptocurrencies. Alongside offers an on-chain index token called AMKT that tracks the crypto market. The index tracks the performance of the top 25 crypto assets, all at once.
How does this crypto index fund work?
AMKT is an on-chain index token that tracks the crypto market. It is rebalanced monthly and reconstituted quarterly to ensure that it accurately reflects the performance of the top 25 crypto assets. The token charges a 0.95% yearly fee for its services.
Alongside Crypto Market Index tokens may always be redeemed for their underlying net assets by Authorized Merchants or users upon successful know-your-customer and AML verification by a third-party service provider.
Advantages of investing in crypto index funds:
– Diversified exposure to the crypto market
– Transparent fees
– Professional management of the fund
Disadvantages of investing in crypto index funds:
– All investments involve risk and uncertainty
– There is no guarantee that any token will grow in value
– Fees may reduce returns
In conclusion, crypto index funds offer a way for investors to gain diversified exposure to the crypto market. These funds are professionally managed and offer transparent fees. However, like all investments, they involve risk and uncertainty. It’s important to carefully consider the potential rewards and risks before investing in a crypto index fund.
© 2024 Cryptopress. For informational purposes only, not offered as advice of any kind.
