There are at least two different approaches to investing in cryptographic assets or any other asset class. One is to actively research and gather information about potentially undervalued companies and make investments at attractive prices. The other is to invest in a balanced portfolio of diverse competing assets.
Warren Buffet is an active investor and The Standard & Poors 500 is a general index of stocks traded in the US. Warren Buffet seeks to maximize his return on a select few well-researched investments. The objective of the index is to decrease the risk of large price swings in any one particular asset and get a more reliable approximation of value for a group of assets.
Cryptographic assets are a young asset class and for the most part everyone holding and trading these assets is an active investor. For a large part of the population passive investing is the only type of investing they will be interested. People lead busy lives and many are not interested in spending countless hours in front of a computer screen.
At DaoStreet we think different. When the herd is going one way that is a good indicator to consider changing directions. If most cryptoasset investors actively manage capital perhaps leveraging tenets from traditional investing will help our portfolios weather the ups and downs of these volatile markets.
I have researched a few different approaches to building an index fund of cryptographic assets. The best implementation I have come across is Twentix. It is a smartcoin on the bitshares blockchain. Smartcoins are assets backed by bitshares in a smart contract. This means there is no need to trust another party to deliver the value of twentix. it is regulated by code.
You can read more details about Twentix here: http://www.twentix.info
I hope you will share your thoughts on twentix or anything related to active vs passive investing in crypto.
I personally am a passive investor, between work, family, and home, I don't have much time to day trade, though I think I could do it if I dedicated some time to it. Looking into twentix
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I opened the twentix website but frankly it would take a lot more than a few minutes to make an informed comment on it. I get the general idea (and like it) and it feels like I know a few other coins doing roughly the same and until I really get into the nitty-gritty I won't be able to point out the differences in any appreciable manner.
I also took another important note from this post - 'When the herd is going one way that is a good indicator to consider changing directions'
Pretty much my sentiments :-)
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I have spent a lot of time researching twentix and other indexes so I definitely agree with wanting to take your time and make an informed position. The key bit of information from the website is this section titled: "Today's Twentix Composition. The next revision will be on 2018/04/21."
That will show how much exposure each unit of twentix has to the top market cap coins. Now the main assets are: BTC ETH BCH EOS and LTC.
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@john-robert, so if we purchase twentix is there any risk other than fluctuations in the assets included? Being back by bitshares I'm guessing we are ok here.
If there is no risk other than in the assets themselves this seems like a no brainer for anyone new to the game, as long as the assets seem logical to them. Thanks for bringing this one to my attention, this is the type of thing that new people who don't want to research too much would get a lot of value from.
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Twentix is a smartcoin with full collateral held in a smart contract. Yes you are right @jakeybrown for most scenarios Twentix will function properly. There is always the potential for a global settlement and a liquidity crunch (and will in fact coincide).
The key distinction between native smartcoins on bitshares dex is they involve less overall risk as a result of the zero counterparty risk.
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What you said about "the herd" is an old way of trading called the Contrarians. It works very well in the stock market and possibly with cryptos. I will check Twentix.
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Exactly @ronaldovelino
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I in my opinion am a passive investor, among paintings, family, and home, I do not have a whole lot time to day change, though I think I should do it if I devoted a while to it. looking into twentix
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One of the drawbacks of a crypto ETF is the market is driven by Bitcoin. When Bitcoin increase, the altcoins increase, the same pattern in the other direction.
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True. What @chesatochi is correctly pointing out is that any basket of cryptoassets will share a high degree of correlation with Bitcoin itself.
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Intresting!
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Thank you for your continued support of SteemSilverGold
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