One of the most common questions asked by Moneyweb readers new to cryptos is where to start.
‘Should I buy Bitcoin, should I buy Ethereum?’
We don’t give out financial advice, and remind readers that cryptos are highly risky, volatile, and, should you choose to invest in them, then do so with money that you are prepared to lose.
Readers are nevertheless bedazzled by the kinds of historical returns generated by cryptocurrencies such as Bitcoin and Ethereum. Bitcoin is up nearly 200% over the last 12 months, and Ethereum an incredible 770%.
Not too late
Another common question is: ‘If they have gone up in price so much over the last year, isn’t it too late to get in? Have I missed the bus?’
Sean Sanders, founder and CEO of crypto investment company Revix, says this is a question he was asking himself when first getting involved in cryptocurrencies back in 2015.
“I also believed I was way too late into the crypto market back in 2015. It’s a question I hear every year, and I am sure it is a question that people will be asking 10 years from now.”
The answer to that question is no, it is not too late to get into cryptos, because we are at the start of an entirely new financial system.
You cannot equate cryptos to stocks. They don’t easily compare.
For a start, a cryptocurrency like Bitcoin does not have cash flows underpinning its price in the same way Apple shares do. People are backing Bitcoin because it is seen as a store of value, something they expect will preserve wealth better than fiat currencies such as the US dollar and the rand.
The story behind Ethereum is somewhat different. It is a relatively new financial network – with its own currency, Ether (ETH) – that serves as a platform for numerous other cryptocurrencies, as well as for the execution of decentralised smart contracts.
Smart contracts are pieces of computer code, written on the Ethereum blockchain, that execute transactions without any intermediary being involved when certain conditions are fulfilled – such as an insurance policy payout for hail-damaged cars when a storm hits, or the ability to lend, borrow and earn interest using ETH as collateral.
Ethereum’s goal is to become a global platform for decentralised applications, allowing users from all over the world to write and run software that is resistant to censorship, downtime and fraud.
ETH is ideal for crypto beginners and veterans alike as it’s one of the largest, most tested and reputable cryptocurrencies around.
The price of ETH has appreciated 386% since the start of 2021 alone, driven by wider adoption and technological improvements that will allow it to perform functions faster and more efficiently.
Sanders says many newcomers to cryptocurrencies choose a direct investment in bitcoin (BTC) and ETH, though increasingly the trend is towards index investing of the type offered by Revix. These crypto ‘Bundles’ are similar to investing in the Satrix 40 exchange-traded fund (ETF) on the JSE, which tracks the performance of the top 40 shares on the JSE.
Spreading the risk
The difference is that the Revix Bundles are focused exclusively on cryptocurrencies.
The Revix Top 10 Bundle – weighted 10% in each of the top 10 biggest cryptos as measured by market cap – has generated a 12-month return of 555%.
Apart from BTC and ETH, this ‘Bundle’ includes cryptocurrencies such as Polkadot and Cardano, both of which are competing with ETH for dominance in the decentralised finance (DeFi) space, as well as Litecoin, Binance Coin and Chainlink.
The performance of the Top 10 Bundle far surpassed that of a direct investment in BTC, which has a 10% weighting in the Bundle. The remaining 90% is spread over nine other cryptocurrencies that have emerged as some of the most compelling stories in the crypto space in the last year – including ETH, Cardano and Tron.
The Revix Smart Contract Bundle spreads your investment across the five largest cryptocurrencies focusing on smart contracts, such as ETH, Cardano, Tron and Polkadot. This Bundle has appreciated in value by more than 430% over the last 12 months.
There’s also the Payment Bundle, which tracks the top five cryptocurrencies that are looking to revolutionise money and how value is transferred. This includes BTC, Litecoin and Stellar. Over the last 12 months, this Bundle has appreciated more than 295%.
Says Sanders: “We designed these Bundles to make it easier for newcomers to cryptocurrencies to invest. Your investment is spread over the top cryptocurrencies as measured by market cap, and rebalanced each month so that your investment remains equally weighted across the best stories in the crypto space. This way, you don’t have to make a guess as to which crypto is going to be the next blow-out star performer. The Bundle automatically takes care of that for you.”
Brought to you by Revix.
Revix brings simplicity, trust and great customer service to investing. Their easy to use online platform enables anyone to securely own the world’s top investments in just a few clicks.
Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
For more information, please visit www.revix.com
This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
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