Advantages of investing in crypto ETFs
Although cryptocurrency and digital assets are relatively new asset classes compared to traditional securities markets, the financial market is gradually becoming interested in and investing in crypto assets. The industry recognizes the need for crypto portfolio management products and solutions. The review of ETF funds submitted by the SEC by numerous agencies in the United States also highlights the coming of this trend.
Through investing in an ETF fund and buying the single fund, you can conveniently invest the whole market and track the stock of popular companies, finally enjoy the development dividends of qualified companies and the wealth of change of economic development. What’s more, an ETF doesn’t need to be managed, the investment cost is low, which is suitable for the ordinary investors.
According to Statista, there were only 7,602 ETFs with a scale of $7.74 trillion, accounting as ⅓ of global stock trading volume all around the world in 2020. Due August 31, 2021, SPDR S&P 500 ETF Trust is the world’s most valuable ETF with a market value of approximately $3966.66 billion.
Compared with buying tokens directly in the encrypted market, investing in encrypted ETF funds has obvious advantages:
User convenience:
For most ordinary users, due to time constraints, you may not have time to continuously monitor the performance of your invested tokens. Encrypted ETF funds do not need to invest too much time. Only through the simplified allocation of assets, they can realize the investment exposure of an asset to a class of assets (industry, probability) without missing the potential high returns of the cryptocurrency market.
Low volatility and long-term:
The crypto market is a 24-hour uninterrupted market, in which the Token fluctuation risk is abnormal, and it is easily affected by various positive and negative news, policies, funds, and behaviors, which can cause the price of the currency to skyrocket and plummet. High volatility is a good thing for professional investors, but for ordinary investors, it is easy for ordinary investors to lose their assets due to unbalanced mentality and inadequate strategies during violent fluctuations.
Encrypted ETF funds are a combination of a basket of Tokens, which reflect their comprehensive performance. Therefore, their price fluctuations are their average value and are passive. They will not cause large fluctuations due to a sharp drop in the price of one of the Tokens. Lower volatility can help reduce risks and maintain long-term and stable investment. This is also the category of family investment.
Diversified income and low cost:
There are many DeFi products in the encryption market, and various business logics (Dex/Lend/Staking) require different tokens, and the handling fees are high. For ordinary users, there are higher thresholds and fees for participation. In the form of ETF funds, users purchase ETF funds, and the platform gathers users’ funds to participate in various DeFi businesses, such as mining, staking, etc. The huge volume means extremely low handling fees, and at the same time, generous income and In return, these will be returned to users who hold ETF funds.
Crypto market ETF outlook
Since the second half of 2020, various DeFi protocol products have been gradually launched, and DeFi TVL has gradually increased. The overall scale of the DeFi market is expanding. The expansion of the scale has attracted more users to participate, but at the same time, it has also put forward new ideas for the market requirements.
Encrypted ETF funds, which are user-friendly, easy to manage, long-term asset allocation and diversified portfolios, are an indispensable product form in the DeFi explosion. Participating in various DeFi ecosystems through ETF funds can not only accumulate more value and assets for ETF funds, but also prosper the entire DeFi ecosystem and long-term development.
For users, it is difficult to participate in all DeFi. Therefore, investing in ETF funds for the DeFi market. Holding ETF funds can gain exposure to the growth and income of the DeFi industry. This is a very convenient investment strategy and method. , And a low-cost way to enter DeFi.
According to Statista data, in 2020, the global ETF management asset scale is 7.74 trillion US dollars, and the trading volume accounts for one-third of the global stock trading volume. From this figure, the growth potential of ETFs can be seen.
For the crypto market, the overall size of the crypto market reached 2.16 trillion U.S. dollars, and DeFi TVL reached 87.12 billion U.S. dollars.
The scale of crypto ETF funds is less than US$500 million, which is 0.5% of DeFi TVL and only 0.02% of the global cryptocurrency market value. We are in the early stages of the crypto ETF market, and the crypto ETF market will show an index in the next few years,level of growth.
Index of popular concepts in the crypto market includes:
1. DeFi Fund: Track the trends and development opportunities of the encrypted DeFi market.
2. Public Chain Index Fund: MCI, which tracks the ecological development of the public chain of the cryptocurrency market.
3. Solana Ecological ETF Fund: MSI, tracking popular and potential projects in the Solana public chain ecosystem.
4. Stable Coin Fund: Balance the fluctuation and value of various stable coins and earn income.
5. NFT Fund: Tracking Crypto GameFi and the market’s hot and potential NFT.
About MatrixETF
MatrixETF is the next generation of decentralized ETF platform to run the cross chain,which goal is to establish a decentralized, automated, personalized and diversified portfolio for users, as well as help users easily enjoy long-term, stable and efficient financial services.
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