11/14/2017

Overview from the team kript.io
Investment crypto funds bring nearly 1000% of revenues per year. Indicators of some crypto funds exceeded 3000% in 2016. At the same time, they are not controlled by the SEC or any other supervisory bodies. Kript reviewed three large crypto funds and found out how to make money on them.
What is crypto fund
It is an investment fund that owns crypto assets — either only bitcoins, as Bitcoin Investment Trust, for example, or several cryptocurrencies: Bitcoin, Ethereum, and Dash, as The Token Fund, for instance.

Crypto funds are called Coin Traded Funds (CTF). Unlike Exchange Traded Funds (ETF), CTF are not traded on any crypt exchanges. Neither the SEC nor any other state bodies legalized them yet.
How crypto fund works
A crypto fund is an analog of hedge funds of the stock market. The staff of crypto funds select the most suitable cryptocurrencies for investment and the blockchain-based projects, buy them using investors' money, monitor the currency rates: sell and rebuy crypto assets.

In a crypto fund, you buy a unit. What it is equal to depends on the conditions of the fund. For example, in the Bitcoin Fund, one share equals one bitcoin, but in The Token Fund the share equals one token —its value is ensured by 16 cryptocurrencies included in the portfolio of the fund. Usually, you can buy the share on the company's website or on the OTC Markets Group, depending on the conditions of the fund.
Crypto funds and their conditions
About: this investment fund was created by the former Vice-President of the International Development of Mail.ru Group Vladimir Smerkis together with a stock trader and a private investor Viktor Shpakovsky.

Although the fund is called «unit» depositors purchase the project's tokens — they can sell them to the company anytime. The fund's money is invested in cryptocurrencies and distributed among 16 assets — the price of the fund's tokens depends on the asset's prices in the portfolio. Fund's currency — a bitcoin, an ether, and dollars. Investors trust this company their assets: fund's managers create a portfolio by themselves. The Token Fund doesn't provide access to crypto exchanges.

Conditions:
there is no a minimum amount of investment and a period of your participation;
you buy and sell fund's tokens only for bitcoins or ethers;
commission for transactions — 5%.
_____________
foundation date: March 2017
portfolio: more than $ 1,5 million
what it owns: Bitcoin, Tether, Tezos, Qtum, Ethereum, TokenStars, Cindicator, Aeternity, Request Network, SONM, NEM, 0x, Starta, Binance Coin, Walton, Byteball
profitability since the beginning: more than 400%
About: this Fund was created by the founders of the brokerage firm EXANTE: Anatoly Knyazev, Gatis Eglitis, and Alexei Kirienko. It is listed on Bloomberg and regulated by the FCA of the United Kingdom. Each customer's account is insured for €20 000. The Fund buys and stores units, 1 unit =1 bitcoin. All investors' assets are stored in the standard registered brokerage accounts, not in crypto wallets.

Conditions:
you can buy their shares for the price starting from 1 BTC;
the minimum deposit for opening an account is €10 000 for individuals and €50 000 for institutional investors;
commission for transactions — from 0,5%;
daily commission for safe storage and administration — 3,5% of the share price.
_______________
foundation date: September 2012
portfolio: more than $200 million
what it owns: Bitcoin
profitability since the beginning: more than 10 000%
Crypto funds of Grayscale Investment Trust
About: the company Barry Silber Grayscale owns three crypto funds: Bitcoin, Ethereum, and Zcash Investment Trust. Each of them is traded on the OTC Markets Group. It is not controlled by the SEC, but to get access to trading on the OTC, the company provides documentation reports.

On OTC you buy fund's pink sheets — securities of the company. Their cost is ensured by a precise cryptocurrency: a bitcoin, an ethereum or a Zcash. This is somewhat practical if you want to own a bitcoin but don't want to explore the crypto world.
Conditions:
one share — 0,09211978 bitcoins;
commission for storing a unit — 2% of the share price annually;
transaction fee — determined by OTC tariffs.

_______________
foundation date: September 2014
portfolio: more than $1 billion
what it owns: Bitcoin
profitability since the beginning: 4371%
Conditions:
one share — 0,98442348 ethereum;
commission for storing a unit — 3% of the share price annually;
transaction fee — determined by OTC tariffs.

_______________
foundation date: April 2017
portfolio: $37,64 million
what it owns: Ethereum
profitability since the beginning: 293,18%
Conditions:
one share — 0,09995205 Zcash;
commission for storing a unit — 2,5% of the share price annually;
transaction fee — determined by OTC tariffs.

_______________
foundation date: October 2017
portfolio: $12,93 million
what it owns: Zcash
profitability since the beginning: 27,68%
Funds vs. Cryptocurrencies
Since the very moment when people started to buy bitcoins, its price climbed by more than 8,23 million percent — in 2009 you could buy one BTC for $0,08, today you have to spend more than $6,6 thousand. The profitability of funds, in comparison, is much lower. This is so because:
a) crypto funds are younger on the market;
b) profitability is reduced due to the fall of other cryptocurrencies.
Where is more profitable?
Crypto funds are responsible for finding promising assets and their safe storage. And they take money for that. It is very convenient for a beginning investor. On average the profitability of crypto funds is higher than the profitability of the market, but if you are lucky, you can create a portfolio that will overtake the fund's annual profitability — and you won't have to pay the commission.
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