eToro CryptoFund – What is and How to Invest in it
The eToro Crypto Fund is the latest news from eToro, one of the absolute leaders in the world of Social Trading.
Cryptocurrencies, which have been experiencing interesting (and often dizzying) gains in the last years, could not but attract the attention of the expert managers at eToro, who took the opportunity to create a dedicated Copy Fund.
eToro Crypto Fund – eToro’s twenty-first copyfund
This has been the comment of Yoni Assia, co-founder and CEO of eToro, at the launch of the CryptoFund:
“We’ve seen a growing number of customers looking for a simpler way to access to cryptocurrency investments in order to build a portfolio in the future. They asked us how to allocate their investments between the two largest cryptocurrency traded on eToro, so we launched an automated, rebalanced investment strategy to simplify their investments in this new interesting asset class.”
With the addition of this latest eToro Crypto Fund, we have now a total of 21 Copyfunds among which eToro investors can choose from.
Here is a complete list of the eToro Copy Funds and their operating logic.
How eToro Crypto Fund is composed
The eToro Crypto Fund is clearly a sectoral fund, dedicated specifically to the world of cryptocurrencies, and belongs to the eToro Market CopyFunds macro category. Started with positions on just two crypto coins, now it invests in:
- Ethereum Classic
These digital currencies are those currently being considered by investors as the best digital coins for type of project, volume of exchanges and reputation.
The CryptoFund invests on these criptocurrencies using a Tactical Asset Allocation approach, which aim to distribute the fund’s capital differently on each digital coins, mainly considering their volatility and their potential for growth. The evaluations on the possible appreciation or depreciation of the cryptocurrencies and their volatility are determined by the eToro team, which rebalances the fund every month.
The pros and cons of the CryptoFund are those already mentioned in our eToro Copy Funds review, including the minimum deposit of € 5,000.00.
The fund is classified with a risk profile of 7 (you can read here to find out about the eToro risk profile). If we consider the scale ranges from 1 to 10, we can already understand that, with a 7, we are talking about a fund with high volatility (and indeed cryptocurrencies are very volatile).
How to gain with the eToro CryptoFund
The CryptoFund invests in highly volatile assets, which are well suited to short-term speculative investment logic.
Despite this, the type of management and allocation executed by the eToro team makes it more suitable for a medium/long term approach.
The question at this point could be:
Is it worthwhile to invest on these assets with a medium to long term time horizons?
The eToro platform is known to be very helpful when searching for information, in particular the opinions of other active and real traders.
In addition to searching on the web, you can make your own opinion by following what eToro experts say about the cryptocurrencies. You can sign up for free and access all the info even with an eToro demo account.
If we consider that …
- Up to a few years ago, these digital coins were known only in the deepweb
- that only today they are beginning to be known by the general public and to be used for payments from major portals like Amazon
- that for the characteristics of the algorithms that generate them, they will be available in a limited quantity (not all of them)
… then the answer is yes, the eToro Cryptofund can be a very interesting medium-long term investment.
This is an investment that has a large margin of growth, which may well be worth investing some part of your capital.
These are very volatile assets. So, on the one hand, the earning potential is good and interesting, on the other hand you have to be ready to climb the roller coaster!
The value of Bitcoin, the most famous cryptocurrency, from May to June 2017 passed from $ 1,700 to $ 3,000, about a + 76% in a month, and then fell to $ 1,800 in July, and rose again to $ 4,000 in August.
Well, that’s what I call roller coasters…