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What are crypto mutual funds and how to invest in them?

Updated: Oct 9, 2023


Crypto assets have become a good way to invest, and many investors want to find ways to do more than just buy individual coins. Mutual funds for crypto assets offer a way to invest in crypto that is diversified and well-managed.


In this thorough blog, we'll explore the world of crypto mutual funds and give you useful tips on how to invest in them wisely with the BitSave platform.


So, What Are Crypto Mutual Funds?

Crypto mutual funds are pools of money from many investors that are used to buy a diverse portfolio of crypto assets. Professional fund managers are in charge of running these funds and making strategic decisions on the investors' behalf.


In simpler terms, they work like traditional mutual funds, but instead of investing in stocks, bonds, or other traditional assets, they invest in crypto assets. Investors in crypto mutual funds buy units in the fund. The fund then uses the money to buy and manage a portfolio of different crypto assets, such as Bitcoin, Ethereum, and others.


The main goal of crypto mutual funds is to give investors access to the crypto asset market while spreading the risk of their investments across different assets. It is especially important in the world of crypto assets, which is very volatile and always changing.


Why Should You Invest In Crypto Mutual Funds?


Investing in crypto mutual funds offers several compelling reasons that make it an attractive option for both seasoned and novice investors.


Diversification:

Crypto mutual funds give you a diversified portfolio of investments because your money is spread out among different crypto assets. This spreads out the risk that comes with putting all your money into one crypto asset. Diversification can be a good way to manage risk in the crypto market, which is very volatile.


Professional Management:

Crypto mutual funds are run by skilled fund managers at BitSave who know a lot about the crypto space. These experts know when to buy, sell, or hold different crypto assets based on the market conditions. Their knowledge could help investors do better with their money.


Accessibility:

Crypto mutual funds are accessible to a wide range of investors, including those who may not have the technical expertise to manage individual crypto assets. You can invest in these funds with relative ease, similar to buying units of a traditional mutual fund.


Liquidity:

Compared to holding individual crypto assets, crypto mutual funds offer better liquidity. You can buy or sell your shares in the fund more easily and quickly. This liquidity is crucial when you need to access your funds or make changes to your investment.


Risk Management:

Crypto investments come with inherent risks, including price volatility and security concerns. Investing in mutual funds reduces the risk associated with holding and managing crypto assets directly. Fund managers at BitSave aim to optimize returns while managing risk.

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Time-Saving:

Crypto mutual funds save you the time and effort required for research, tracking, and managing a diverse portfolio of digital assets. Instead, you can rely on the fund manager's expertise to handle these tasks.


Reduced Stress:

Due to how quickly prices change, the crypto market can be hard on your emotions. You can reduce the emotional stress that comes with managing crypto assets by giving your investments to professionals.


How to Invest in Crypto Mutual Funds through BitSave?

Now that you know the basics and advantages, let's look at how to invest in crypto mutual funds:


Here are the steps on how to invest in crypto mutual funds:


Open an account at BitSave: You can download the BitSave app from the Play store or App Store and sign up using your mobile number.


Fund your BitSave wallet: You can do this by transferring money from your bank account through UPI, IMPS or NEFT in India. You can also easily transfer crypto assets from external accounts/wallets.


Find a preferred crypto mutual fund: There are a few different types of crypto mutual funds available, so take some time to read about the different options and choose one that fits your investment goals and risk tolerance. You can look into BitSave's flagship product that tracks the Bloomberg Galaxy Crypto Index.


Buy the fund units: Once you've chosen a crypto mutual fund, you can buy units of it using the funds in your BitSave wallet.


Conclusion

Investing in crypto mutual funds is an excellent way to gain exposure to the crypto market without the complexities of individual asset management. However, it's crucial to conduct thorough research, choose reputable platforms, and diversify your investments to mitigate risks.


With the right approach and due diligence, you can harness the potential of crypto mutual funds to build a diversified and profitable crypto portfolio.


FAQs on Crypto Mutual Funds

Q: How much should I invest in crypto mutual funds?

There is no one-size-fits-all answer. Your investment amount should align with your financial goals and risk tolerance. Start with an amount you can afford to lose. You can also chat with a personal Investment Planner via BitSave app to understand your optimum allocation amount.


Q: Are crypto mutual funds safe?

While they offer diversification and professional management, crypto mutual funds are not risk-free. The crypto market can be volatile, and fund performance may fluctuate.


Q: What fees are associated with crypto mutual funds?

Fees can include management fees, entry fees and exit fees. Always read the fund's prospectus to understand the fee structure.


Q: Are crypto mutual funds regulated?

The regulatory status of crypto mutual funds can vary by jurisdiction. Some funds operate under specific regulations and oversight, while others may not be subject to any regulatory framework. It's crucial to research the regulatory status of a fund before investing and choose platforms and funds that comply with relevant regulations.


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