Crypto Currency Index

What's up my STEEMIANS.

Sorry but I'm having trouble posting some of the images today. Not sure why but the upload function shows something about unable to connect to server. So I'll try and repost the images next week. In the meantime here are the comments I wrote.

So new topic feed....and something that I've been noodling around in terms of figuring if this is the way of the future...

As crypto currencies have become more widely adopted. One of the inevitable results would be the creation of investment vehicles to represent the market. More specifically the creation of an index is something that was needed. To recap, Bitcoin futures have been created by CME. So you can trade Bitcoin now on a standard exchange. One can also trade various cryptocurrencies on various exchanges (Binance, Coinbase, Abra, Kraken etc). The list of available exchanges are vast and extensive and is accessible in many various countries. However, while one can trade the various ICOs and cryptocurrencies, the fact is that for your typical retail investor that is not well versed in crypto, an index is needed. Its very much like investing in the market by buying the S&P 500 Index ETF. Buying the S&P 500 you have gained “beta” or market exposure. Its cheap and you get exposure. Similar buying a Cryptocurrency index eliminates the issue of diversification and gets you a immediate diversified portfolio of the top cryptocurrencies.

Galaxy Digital, launched by Michael Novogratz, is one of the first investment / hedge funds to create and launch fund and index ( Galaxy Benchmark Crypto Index Fund (GBCIF). This index holds 9 cryptocurrencies. The index created is utilized by Bloomberg (Bloomberg Galaxy Crypto Index.) The fact that Bloomberg has endorsed this will be huge and is probably something that one cannot ignore. I think if you were a newbie, investing several thousand dollars at this point into the fund/index makes sense. Unfortunately, the minimum is $250K and they only allow accredited investors for now.

The performance of the index has been reflective of what we have all experienced. A very harsh selloff/decline. Since the index launched earlier this year (May), the Index is down (-50.6%). This has been challenging for any new investor. While I think one can make an argument that this is a good buying opportunity, its hard to convince any investor that has lost 50% to invest more. Nevertheless, I think that is the argument that is needed to be discussed.

I’ll leave it here for now but next week, I’ll dig in deeper about Galaxy Digital and what they are attempting to do