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I have attempted to duplicate this index fund manually by purchasing the top 25 cryptocurrencies (market-cap weighted) over the past year or so. I'll say that i

I have attempted to duplicate this index fund manually by purchasing the top 25 cryptocurrencies (market-cap weighted) over the past year or so. I'll say that it was hardly worth the enormous work involved, and these index funds cannot come soon enough to non-accredited investors. In some cases it's not possible to do perfectly alone: NEO has a minimum unit of 1 coin, and so if you wanted it to not be overweighted, you'd need to have a total portfolio that is an integer multiple of $6700 right now. However, I would not buy this fund from Coinbase since they are not a neutral player, and the market is not regulated yet. There are still great advantages in owning coins yourself - I expect that, as an average investor, I will certainly be prone to manipulation in some way. Alas, the greatest gains are probably long-since gone. No risk, no reward.

zone411 9y ago
Why was there enormous work involved? Were you rebalancing very often? Note that Coinbase's fund will be made up of only four cryptocurrencies, not 25 like yours.
- slg 9y ago
  Yeah, this is an index of 4 securities and is rebalanced annually. Coinbase is charging a 2% fee for what amounts to automating a max of 4 transactions a year. I get that people are excited about cryptocurrencies becoming available in more traditional investment vehicles, but this particular index fund seems almost completely unnecessary.
  - froindt 9y ago
    I'm admittedly not up on rebalancing policies. With a fund of highly volatile assets, would rebalancing more frequently be necessary? I'm not thinking daily, but perhaps every month or so?
    - solarkraft 9y ago
      I believe so. The worth of your portfolio is the worth of the assets. Bitcoin dropped a ton in even a month. There are still changes of a few percent possible in less than a day, so yearly balancing sounds insanely dumb to me.
      - ericd 9y ago
        Index funds are usually market cap weighted, so day to day changes in value don't require rebalancing, since if a security suddenly doubles, its market cap does too, and it's therefore still held in the correct proportion to the other securities in the index.
    - slg 9y ago
      Yes, at the most general level highly volatile assets should be rebalanced more frequently. However, that isn't going to be a universal rule. It will depend on what is causing the volatility and whether that is more a product of the market or something specific related to the assets. Rebalancing too frequently is also a very real possibility so more is not always better. Another consideration specific to cryptocurrencies like Bitcoin is the relatively high transaction fee. You don't want to see your investments be whittled away by frequent transaction fees doing unnecessary rebalances. I haven't spent enough time researching cryptocurrencies to know how all these considerations shake out when it comes to this specific index fund, but as a pure gut instinct the annual rebalancing was less frequent than I would have expected from this type of fund.
      - proofofmoon 9y ago
        Rebalancing cryptoassets on the same exchange (without withdrawing to a wallet [1]) doesn't require on-chain transactions. The fee would be the order fill fee, which for GDAX is 0-0.25%, much less than 2% of the account balance. ([1] For the not-your-keys-not-your-coins crowd: if you don't trust Coinbase with the coins, you can't trust it with the fund either.)
    - the_gastropod 9y ago
      The point of market cap weighting is that rebalancing is mostly unnecessary. The only events that require a rebalance is when a coin is added or removed from the index.
  - cies 9y ago
    > Coinbase is charging a 2% fee for what amounts to automating a max of 4 transactions a year. I came up with some more they do for 2%/y: * Buy more coins when their fund expands * Secure the shit out of those private keys
    - daveguy 9y ago
      > Secure the shit out of those private keys Well I hope they are doing that already. Initial coin buy is part of those 4 / yr.
    - vkou 9y ago
      * Secure the shit out of those private keys Are they insured for 100% of the value of the coins on those private keys? If not, you are paying 2% YoY + X%, where X% is your counterparty risk - the odds that someone at Coinbase fucks up, and your money is irreversibly gone.
      - DennisP 9y ago
        That's a good question. If the answer is "yes" then maybe that's the reason for the high fee. Currently they have insurance on their hot wallet coins, which I think is about 5% of the total. The cold wallets aren't insured, but they're paper wallets held in safe deposit boxes all over the world, so it's unlikely that a large percentage would be lost.
    - evrydayhustling 9y ago
      Besides the fact that it should cost nothing like 2% of AUM / year, securing the private keys pays for itself when they claim every fork/spin-off coin that distributes based on bitcoin blockchain.
      - e12e 9y ago
        Are you saying coinage handling bcc in a sane manner is the exception, not the rule? Are there any other forks that have enough value/liquidity that they should be "given back" to the buyers?
  - pazimzadeh 9y ago
    The legal text says: "This announcement [...] is not an offer to sell or a solicitation of an offer to purchase interests in any fund or investment vehicle.
  - moduspol 9y ago
    But they can't necessarily make those transactions easily with a ton of money in the fund, right? I mean if the current price of BTC is $10,500, buying $10m worth of BTC will drive up the price as they're doing it. So how can you rebalance accurately if you're affecting the price of these cryptocurrencies while you do it? Or do they just do like a "best guess" and overbuy a little and then sell off to get the balance right? I guess any index fund would have this issue, though.
- mlerner 9y ago
  The Bitwise HOLD10 (where I work) handles a lot of the hard work around rebalancing and taxes.
- mlerner 9y ago
  I think rebalancing with Coinbase's selection of coins is pretty easy. When you have a more complex basket (for context, I work at Bitwise Investments, which runs the Bitwise HOLD10 Index), it is more difficult to decide what goes into the basket. For example, several coins (like Neo and Ripple) have supplies that grow and are centrally controlled, but many coins have planned inflation schedules. We know that the supply of many of the large-cap coins is going to grow over the next couple of years, and that needs to be taken into consideration when valuing them. To explain why that is important: if people buy a coin at a certain price _knowing_ that a certain amount of inflation is going to happen, that means investors think that the market cap of the coin is actually much more (think of this like Discounted Cash Flow). Restated, if people buy these coins knowing that the supply is actually going up, that means that they think that the value of the coin is actually much higher than the current market cap. If you want to learn more about indexing methodologies for cryptocurrencies, you should check out our website: https://www.bitwiseinvestments.com/index https://www.bitwiseinvestments.com/index
JustAnotherPat 9y ago
>Coinbase Index Fund will invest in assets in proportion to their relative market capitalizations and rebalance annually on January 1st. This thing is rebalanced only once a year. Would take 5 minutes to actually duplicate this fund since it's only 4 coins....
- throwaway1748 9y ago
  Presumably they'll be launching many more coins this year. There are other advantages in holding crypto through a fund rather than directly, like simplified tax accounting and not having to worry about security, either digital or physical. For many people that is worth 2%
  - TheCoelacanth 9y ago
    2% is a massive fee. That is almost reaching hedge fund levels. For what is pretty much a passively managed fund it seems hard to justify such a high fee.
  - nefitty 9y ago
    They've announced a few times that they are not planning on adding any coins, anytime soon. I think they are better off focusing on this sort of project to keep current customers, marketing to get new ones and strengthening their customer support. New coins make all of those tasks much more complex, for probably very little competitive edge, at the moment.
- mlerner 9y ago
  The Bitwise HOLD10 (run by Bitwise, where I work) rebalances every month.
an4rchy 9y ago
Shouldn't this be pretty simple with an API and a basic script? You can get the overall market cap and percentages based on something like Coinmarketcap and then just set limit orders to buy/sell rounded to nearest coin requirement.
- pbreit 9y ago
  It’s easier than that. Just buy the 4 coins in their current market cap proportions and revisit once/year.
xPhobophobia 9y ago
What made it not worth it? No real overall gain in value? Not worth your time?
logicallee 9y ago
>since they [Coinbase] are not a neutral player Why do you say this? (The part I added in bracket part is unambiguous in your sentence.) Coinbase doesn't have its own coin, for example. (That is the main thing that I would think would make someone "not neutral".) Can you explain your thinking, or tell me what facts I'm missing?
- mancerayder 9y ago
  Not the person you're replying to, but perhaps the choice to add BCH to Coinbase and GDAX due to perceived personal connections between the founder and Ver? Out of all the coins, they've chosen BTC, ETH, LTC and now BCH (which crashed viciously not just right after the lockup period but immediately in the week following).
- JumpCrisscross 9y ago
  The people choosing which coins to include and how to weight them have tremendous power. They, and their buddies, will be tempted to (a) re-constitute the index to favour assets they own or (b) buy and sell ahead of re-constitution using insider information. “Painting the tape” is a problem with proper indices; here, someone on the GDAX side could conceivably just mess with the records.
  - e12e 9y ago
    > someone on the GDAX side could conceivably just mess with the records. ... On the blockchain? I suppose you mean the pointers to which users controls what, in the internal db? Ie: straight up fraud. I'm not convinced having access to a large order lists doesn't already open the door to insider trading?
    - JumpCrisscross 9y ago
      > ... On the blockchain? The index is market capitalization weighted. "The market capitalization of each constituent asset is calculated as the price of the asset multiplied by the supply of the asset" [1], where the "price for each constituent asset is the last trade price on the GDAX USD order book" (2.6). The market capitalization, and thus weighting schema, is an entirely internal product of Coinbase's data. > I'm not convinced having access to a large order lists doesn't already open the door to insider trading? Currently, an insider could (a) give their orders better execution than the market or (b) foment a spike/crash by "painting the tape". This is risky and leaves a paper trail. "The Coinbase Index Committee consists of one member representing Coinbase, and two unaffiliated independent members who have experience in index creation and oversight" (7.4). Those people are powerful. They can take economically-significant actions based on their subjective determinations. Convincing one of them to (a) tell you how they're rebalancing or what assets they're adding/removing when or (b) rebalance in a way that helps your portfolio can be done entirely over a glass of beer. Still risky and illegal. But less detectable than before. This structure of incentives (small group of subjective decision makers operating on the basis of internal data) historically fails. (See the Libor scandals [2], where we only nailed those involved because they coördinated over instant messages.) Even if the first batch of three are honest, all it takes is one bad apple to spoil the bunch. [1] https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf § 2.4 [2] https://en.wikipedia.org/wiki/Libor_scandal https://en.wikipedia.org/wiki/Libor_scandal
rektlessness 9y ago
I suggest those interested in Crypto Index Traded Funds to look into Crypto20. This fund provides a way to track the performance of the crypto markets as a whole by holding a single crypto asset. "Crypto20 is a tokenized, closed-end index fund (CEF) which passively tracks the top twenty cryptocurrency assets by market capitalisation. All profits are reinvested into the fund." Here is the link to the whitepaper for those interested: https://static.crypto20.com/pdf/c20-whitepaper.pdf https://static.crypto20.com/pdf/c20-whitepaper.pdf
- solotronics 9y ago
  his transparent is this fund?
- haggenballs 9y ago
  One thing I really don't like about Crypto20 is this: "The liquidation option offers a price floor protection – this ensures the price never drops below that of the underlying assets because of market manipulation. Prices are, however, free to increase as speculative value is created by the high demand for a low-cost, diversified and automated cryptocurrency portfolio that can be held as a single token" A unit of Crypto20 can be trading at a premium to the actual underlying assets.
  - marc1 9y ago
    Why don’t you like that it trades at a premium? It is a close-ended fund.
- afishisafish 9y ago
  There's also the Dutch https://triaconta.com https://triaconta.com which offers the Combicoin as an ERC20 token on the Ethereum network.
throwaway1748 9y ago
There are also great disadvantages from owning coins yourself, like physical security.
haggenballs 9y ago
I had the same problems with re-balancing my own portfolio and ended up creating a trading bot that automatically diversifies my investment portfolio across the top 20 coins by market cap (10% capped). It is heavily inspired by the crypto20 whitepaper. For anyone that is interested, you can find the project here: www.hodlbot.io I'm about 1-2 weeks from the MVP launch. Only the top 20 coins by market cap fund will be available at the start. In the future users will be able to create their own custom weightings. The bot requires users to have a Binance account and uses their API key (trade only, no withdrawal access), to execute monthly rebalances. Users will always own their own coins. At this point, I haven't run into any huge issues with min trading amounts given a reasonable initial investment amount (~0.5 ETH). For example, the NEO example you mentioned.... the min trading amount on Binnace is actually 0.01 NEO (~$1.1 USD). I'll be making the project open source in the future and sharing with you all!
- thinkmassive 9y ago
  > The bot requires users to have a Binance account ... (trade only, no withdrawal access) > Users will always own their own coins. To be fair, users do not actually own the coins if Binance owns the coins. Sounds like a cool bot though, and great looking site! I signed up for the private beta. Looking forward to the open source!
  - hanniabu 9y ago
    Blocknet is an awesome open source project you may want to look into. It's an interoperability protocol and one example use-case project they built on it is a trustless decentralized exchange that allows you to trade directly from your wallet.
    - haggenballs 9y ago
      That's awesome. I definitely want to move to decentralized exchanges ASAP to minimize the trust required for these kinds of transactions.
    - andypants 9y ago
srik 9y ago
Binance lets you get NEO under 1 unit. and they workout the math so you a proper share of the gas as well.
- ro-_-b 9y ago
  even on cryptopia you can buy a fraction of NEO
  - kinggfx 9y ago
    You won't be able to withdraw anything other than round numbers to a proper NEO wallet. When the 'coins' are in the exchange they can slice it up however they want because they aren't actually transacting on the blockchain every time you buy and sell, just using their internal database.
free2rhyme214 9y ago
The greatest gains are not long since gone or we'd already have perfectly working dApps.
debt 9y ago
Is simply buying the top 25 cryptocurrencies duplicating an index fund? I didn't know an index fund was just a bundle of stocks.
mifeng 9y ago
If you want to buy this Coinbase index fund, just do this: 1. Log into Coinbase 2. Buy [BTC, ETH, BCC, LTC] with [62%, 27%, 7%, 4%] weights 3. Check back in one year and rebalance That's it! As an added bonus, you just avoided 2% fees and can "redeem" anytime.
- mifeng 9y ago
  Edit: don't do this on coinbase, buy on GDAX instead (same login as coinbase)
- b4lancesh33t 9y ago
  I'm not sure this is such good advice. It means you're guaranteed to miss out on high appreciation of anything but the largest coins. That's all well and good for a less volatile scenario like the stock market where the top20 is pretty well correlated with the top2000. But given the volatility of digital assets, i would worry that this strategy leaves more on the table.
  - mifeng 9y ago
    Note that I conditioned the advice with "if you want to buy this Coinbase index fund." The fund only has those 4 coins.
    - b4lancesh33t 9y ago
      Oh. I thought for some reason that their index included the top 25.
- keyle 9y ago
  Interesting mix hey (theirs). I still wonder why bother with 4% LTC. You'd be better off doing 50, 50, 0, 25 imho.
  - rocqua 9y ago
    Isn't LTC the main coin that uses a lightning network ATM? Because if so, it is still a decent choice if you want a lightning network. BTC is moving in that direction, but it might still not go there.
mlerner 9y ago
Bitwise Investments has a fund (the HOLD10 Index: https://www.bitwiseinvestments.com/ https://www.bitwiseinvestments.com/) that handles a lot of the hard work around rebalancing/taxes/security. We are currently only open to accredited investors to, but have plans to open up more widely.
homero 9y ago
How's $6700 relevant?
- zerocrates 9y ago
  NEO's current price is ~ $108, so I believe the parent post is saying that NEO represents somewhere around 1.6% of the market cap of top 25. Since you must buy at least 1.0 NEO, if you want to balance things out just right, you'd need to have a total investment of at least $6700. Anything less and you either have to leave NEO out entirely or you have to still have the minimum of 1, which will be a larger share of your holdings than its relative market cap.

zone411 9y ago

Why was there enormous work involved? Were you rebalancing very often? Note that Coinbase's fund will be made up of only four cryptocurrencies, not 25 like yours.

slg 9y ago
Yeah, this is an index of 4 securities and is rebalanced annually. Coinbase is charging a 2% fee for what amounts to automating a max of 4 transactions a year. I get that people are excited about cryptocurrencies becoming available in more traditional investment vehicles, but this particular index fund seems almost completely unnecessary.
- froindt 9y ago
  I'm admittedly not up on rebalancing policies. With a fund of highly volatile assets, would rebalancing more frequently be necessary? I'm not thinking daily, but perhaps every month or so?
  - solarkraft 9y ago
    I believe so. The worth of your portfolio is the worth of the assets. Bitcoin dropped a ton in even a month. There are still changes of a few percent possible in less than a day, so yearly balancing sounds insanely dumb to me.
    - ericd 9y ago
      Index funds are usually market cap weighted, so day to day changes in value don't require rebalancing, since if a security suddenly doubles, its market cap does too, and it's therefore still held in the correct proportion to the other securities in the index.
  - slg 9y ago
    Yes, at the most general level highly volatile assets should be rebalanced more frequently. However, that isn't going to be a universal rule. It will depend on what is causing the volatility and whether that is more a product of the market or something specific related to the assets. Rebalancing too frequently is also a very real possibility so more is not always better. Another consideration specific to cryptocurrencies like Bitcoin is the relatively high transaction fee. You don't want to see your investments be whittled away by frequent transaction fees doing unnecessary rebalances. I haven't spent enough time researching cryptocurrencies to know how all these considerations shake out when it comes to this specific index fund, but as a pure gut instinct the annual rebalancing was less frequent than I would have expected from this type of fund.
    - proofofmoon 9y ago
      Rebalancing cryptoassets on the same exchange (without withdrawing to a wallet [1]) doesn't require on-chain transactions. The fee would be the order fill fee, which for GDAX is 0-0.25%, much less than 2% of the account balance. ([1] For the not-your-keys-not-your-coins crowd: if you don't trust Coinbase with the coins, you can't trust it with the fund either.)
  - the_gastropod 9y ago
    The point of market cap weighting is that rebalancing is mostly unnecessary. The only events that require a rebalance is when a coin is added or removed from the index.
- cies 9y ago
  > Coinbase is charging a 2% fee for what amounts to automating a max of 4 transactions a year. I came up with some more they do for 2%/y: * Buy more coins when their fund expands * Secure the shit out of those private keys
  - daveguy 9y ago
    > Secure the shit out of those private keys Well I hope they are doing that already. Initial coin buy is part of those 4 / yr.
  - vkou 9y ago
    * Secure the shit out of those private keys Are they insured for 100% of the value of the coins on those private keys? If not, you are paying 2% YoY + X%, where X% is your counterparty risk - the odds that someone at Coinbase fucks up, and your money is irreversibly gone.
    - DennisP 9y ago
      That's a good question. If the answer is "yes" then maybe that's the reason for the high fee. Currently they have insurance on their hot wallet coins, which I think is about 5% of the total. The cold wallets aren't insured, but they're paper wallets held in safe deposit boxes all over the world, so it's unlikely that a large percentage would be lost.
  - evrydayhustling 9y ago
    Besides the fact that it should cost nothing like 2% of AUM / year, securing the private keys pays for itself when they claim every fork/spin-off coin that distributes based on bitcoin blockchain.
    - e12e 9y ago
      Are you saying coinage handling bcc in a sane manner is the exception, not the rule? Are there any other forks that have enough value/liquidity that they should be "given back" to the buyers?
- pazimzadeh 9y ago
  The legal text says: "This announcement [...] is not an offer to sell or a solicitation of an offer to purchase interests in any fund or investment vehicle.
- moduspol 9y ago
  But they can't necessarily make those transactions easily with a ton of money in the fund, right? I mean if the current price of BTC is $10,500, buying $10m worth of BTC will drive up the price as they're doing it. So how can you rebalance accurately if you're affecting the price of these cryptocurrencies while you do it? Or do they just do like a "best guess" and overbuy a little and then sell off to get the balance right? I guess any index fund would have this issue, though.
mlerner 9y ago
The Bitwise HOLD10 (where I work) handles a lot of the hard work around rebalancing and taxes.
mlerner 9y ago
I think rebalancing with Coinbase's selection of coins is pretty easy. When you have a more complex basket (for context, I work at Bitwise Investments, which runs the Bitwise HOLD10 Index), it is more difficult to decide what goes into the basket. For example, several coins (like Neo and Ripple) have supplies that grow and are centrally controlled, but many coins have planned inflation schedules. We know that the supply of many of the large-cap coins is going to grow over the next couple of years, and that needs to be taken into consideration when valuing them. To explain why that is important: if people buy a coin at a certain price _knowing_ that a certain amount of inflation is going to happen, that means investors think that the market cap of the coin is actually much more (think of this like Discounted Cash Flow). Restated, if people buy these coins knowing that the supply is actually going up, that means that they think that the value of the coin is actually much higher than the current market cap. If you want to learn more about indexing methodologies for cryptocurrencies, you should check out our website: https://www.bitwiseinvestments.com/index https://www.bitwiseinvestments.com/index

JustAnotherPat 9y ago

>Coinbase Index Fund will invest in assets in proportion to their relative market capitalizations and rebalance annually on January 1st. This thing is rebalanced only once a year. Would take 5 minutes to actually duplicate this fund since it's only 4 coins....

throwaway1748 9y ago
Presumably they'll be launching many more coins this year. There are other advantages in holding crypto through a fund rather than directly, like simplified tax accounting and not having to worry about security, either digital or physical. For many people that is worth 2%
- TheCoelacanth 9y ago
  2% is a massive fee. That is almost reaching hedge fund levels. For what is pretty much a passively managed fund it seems hard to justify such a high fee.
- nefitty 9y ago
  They've announced a few times that they are not planning on adding any coins, anytime soon. I think they are better off focusing on this sort of project to keep current customers, marketing to get new ones and strengthening their customer support. New coins make all of those tasks much more complex, for probably very little competitive edge, at the moment.
mlerner 9y ago
The Bitwise HOLD10 (run by Bitwise, where I work) rebalances every month.

an4rchy 9y ago

Shouldn't this be pretty simple with an API and a basic script? You can get the overall market cap and percentages based on something like Coinmarketcap and then just set limit orders to buy/sell rounded to nearest coin requirement.

pbreit 9y ago
It’s easier than that. Just buy the 4 coins in their current market cap proportions and revisit once/year.

xPhobophobia 9y ago

What made it not worth it? No real overall gain in value? Not worth your time?

logicallee 9y ago

>since they [Coinbase] are not a neutral player Why do you say this? (The part I added in bracket part is unambiguous in your sentence.) Coinbase doesn't have its own coin, for example. (That is the main thing that I would think would make someone "not neutral".) Can you explain your thinking, or tell me what facts I'm missing?

mancerayder 9y ago
Not the person you're replying to, but perhaps the choice to add BCH to Coinbase and GDAX due to perceived personal connections between the founder and Ver? Out of all the coins, they've chosen BTC, ETH, LTC and now BCH (which crashed viciously not just right after the lockup period but immediately in the week following).
JumpCrisscross 9y ago
The people choosing which coins to include and how to weight them have tremendous power. They, and their buddies, will be tempted to (a) re-constitute the index to favour assets they own or (b) buy and sell ahead of re-constitution using insider information. “Painting the tape” is a problem with proper indices; here, someone on the GDAX side could conceivably just mess with the records.
- e12e 9y ago
  > someone on the GDAX side could conceivably just mess with the records. ... On the blockchain? I suppose you mean the pointers to which users controls what, in the internal db? Ie: straight up fraud. I'm not convinced having access to a large order lists doesn't already open the door to insider trading?
  - JumpCrisscross 9y ago
    > ... On the blockchain? The index is market capitalization weighted. "The market capitalization of each constituent asset is calculated as the price of the asset multiplied by the supply of the asset" [1], where the "price for each constituent asset is the last trade price on the GDAX USD order book" (2.6). The market capitalization, and thus weighting schema, is an entirely internal product of Coinbase's data. > I'm not convinced having access to a large order lists doesn't already open the door to insider trading? Currently, an insider could (a) give their orders better execution than the market or (b) foment a spike/crash by "painting the tape". This is risky and leaves a paper trail. "The Coinbase Index Committee consists of one member representing Coinbase, and two unaffiliated independent members who have experience in index creation and oversight" (7.4). Those people are powerful. They can take economically-significant actions based on their subjective determinations. Convincing one of them to (a) tell you how they're rebalancing or what assets they're adding/removing when or (b) rebalance in a way that helps your portfolio can be done entirely over a glass of beer. Still risky and illegal. But less detectable than before. This structure of incentives (small group of subjective decision makers operating on the basis of internal data) historically fails. (See the Libor scandals [2], where we only nailed those involved because they coördinated over instant messages.) Even if the first batch of three are honest, all it takes is one bad apple to spoil the bunch. [1] https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf § 2.4 [2] https://en.wikipedia.org/wiki/Libor_scandal https://en.wikipedia.org/wiki/Libor_scandal

rektlessness 9y ago

I suggest those interested in Crypto Index Traded Funds to look into Crypto20. This fund provides a way to track the performance of the crypto markets as a whole by holding a single crypto asset. "Crypto20 is a tokenized, closed-end index fund (CEF) which passively tracks the top twenty cryptocurrency assets by market capitalisation. All profits are reinvested into the fund." Here is the link to the whitepaper for those interested: https://static.crypto20.com/pdf/c20-whitepaper.pdf https://static.crypto20.com/pdf/c20-whitepaper.pdf

solotronics 9y ago
his transparent is this fund?
haggenballs 9y ago
One thing I really don't like about Crypto20 is this: "The liquidation option offers a price floor protection – this ensures the price never drops below that of the underlying assets because of market manipulation. Prices are, however, free to increase as speculative value is created by the high demand for a low-cost, diversified and automated cryptocurrency portfolio that can be held as a single token" A unit of Crypto20 can be trading at a premium to the actual underlying assets.
- marc1 9y ago
  Why don’t you like that it trades at a premium? It is a close-ended fund.
afishisafish 9y ago
There's also the Dutch https://triaconta.com https://triaconta.com which offers the Combicoin as an ERC20 token on the Ethereum network.

throwaway1748 9y ago

There are also great disadvantages from owning coins yourself, like physical security.

haggenballs 9y ago

I had the same problems with re-balancing my own portfolio and ended up creating a trading bot that automatically diversifies my investment portfolio across the top 20 coins by market cap (10% capped). It is heavily inspired by the crypto20 whitepaper. For anyone that is interested, you can find the project here: www.hodlbot.io I'm about 1-2 weeks from the MVP launch. Only the top 20 coins by market cap fund will be available at the start. In the future users will be able to create their own custom weightings. The bot requires users to have a Binance account and uses their API key (trade only, no withdrawal access), to execute monthly rebalances. Users will always own their own coins. At this point, I haven't run into any huge issues with min trading amounts given a reasonable initial investment amount (~0.5 ETH). For example, the NEO example you mentioned.... the min trading amount on Binnace is actually 0.01 NEO (~$1.1 USD). I'll be making the project open source in the future and sharing with you all!

thinkmassive 9y ago
> The bot requires users to have a Binance account ... (trade only, no withdrawal access) > Users will always own their own coins. To be fair, users do not actually own the coins if Binance owns the coins. Sounds like a cool bot though, and great looking site! I signed up for the private beta. Looking forward to the open source!
- hanniabu 9y ago
  Blocknet is an awesome open source project you may want to look into. It's an interoperability protocol and one example use-case project they built on it is a trustless decentralized exchange that allows you to trade directly from your wallet.
  - haggenballs 9y ago
    That's awesome. I definitely want to move to decentralized exchanges ASAP to minimize the trust required for these kinds of transactions.
  - andypants 9y ago

srik 9y ago

Binance lets you get NEO under 1 unit. and they workout the math so you a proper share of the gas as well.

ro-_-b 9y ago
even on cryptopia you can buy a fraction of NEO
- kinggfx 9y ago
  You won't be able to withdraw anything other than round numbers to a proper NEO wallet. When the 'coins' are in the exchange they can slice it up however they want because they aren't actually transacting on the blockchain every time you buy and sell, just using their internal database.

free2rhyme214 9y ago

The greatest gains are not long since gone or we'd already have perfectly working dApps.

debt 9y ago

Is simply buying the top 25 cryptocurrencies duplicating an index fund? I didn't know an index fund was just a bundle of stocks.

mifeng 9y ago

If you want to buy this Coinbase index fund, just do this: 1. Log into Coinbase 2. Buy [BTC, ETH, BCC, LTC] with [62%, 27%, 7%, 4%] weights 3. Check back in one year and rebalance That's it! As an added bonus, you just avoided 2% fees and can "redeem" anytime.

mifeng 9y ago
Edit: don't do this on coinbase, buy on GDAX instead (same login as coinbase)
b4lancesh33t 9y ago
I'm not sure this is such good advice. It means you're guaranteed to miss out on high appreciation of anything but the largest coins. That's all well and good for a less volatile scenario like the stock market where the top20 is pretty well correlated with the top2000. But given the volatility of digital assets, i would worry that this strategy leaves more on the table.
- mifeng 9y ago
  Note that I conditioned the advice with "if you want to buy this Coinbase index fund." The fund only has those 4 coins.
  - b4lancesh33t 9y ago
    Oh. I thought for some reason that their index included the top 25.
keyle 9y ago
Interesting mix hey (theirs). I still wonder why bother with 4% LTC. You'd be better off doing 50, 50, 0, 25 imho.
- rocqua 9y ago
  Isn't LTC the main coin that uses a lightning network ATM? Because if so, it is still a decent choice if you want a lightning network. BTC is moving in that direction, but it might still not go there.

mlerner 9y ago

Bitwise Investments has a fund (the HOLD10 Index: https://www.bitwiseinvestments.com/ https://www.bitwiseinvestments.com/) that handles a lot of the hard work around rebalancing/taxes/security. We are currently only open to accredited investors to, but have plans to open up more widely.

homero 9y ago

How's $6700 relevant?

zerocrates 9y ago
NEO's current price is ~ $108, so I believe the parent post is saying that NEO represents somewhere around 1.6% of the market cap of top 25. Since you must buy at least 1.0 NEO, if you want to balance things out just right, you'd need to have a total investment of at least $6700. Anything less and you either have to leave NEO out entirely or you have to still have the minimum of 1, which will be a larger share of your holdings than its relative market cap.