The overall market capitalization of cryptocurrencies has surpassed $3 trillion for the first time ever, according to data from CoinGecko. The new milestone came shortly after Ethereum entered a period of price discovery alongside Bitcoin hitting record highs yet again.
Similar bullish price action can be seen across the board, as some of the most popular altcoins appear to have entered a new uptrend. Solana, Polkadot, Avalanche, and Terra are all rallying, with little clear resistance ahead.
Now that most digital assets look to be heading to greener pastures, and with a new coin seemingly in the spotlight each week some investors are coming to realize the power of an Index Fund that tracks the performance of multiple cryptocurrencies.
The truth of the matter is that despite the bullish price action seen recently, the cryptocurrency market has, in our view, not reached overbought territory yet. Institutional capital has just begun to pour in, and interest is rising among high-net-worth individuals.
Fidelity Digital Assets found that 36% of the institutional investors it surveyed had invested in digital assets, while nearly 80% specified that they found something “appealing” about them. Roughly 33% of respondents also noted that these assets had significant upside potential.
One of the main barriers preventing institutions from entering the space is trusted custody solutions and a well-defined regulatory framework. Still, the increased scrutiny from regulators and lawmakers alike could level the playing field and allow for institutional investors to dive in headfirst. There are a few lobbyists who are already fighting to shape the future of this nascent asset class.
For instance, Kristin Smith, executive director of the Blockchain Association, has been explaining cryptocurrency to lawmakers in an effort to bring more clarity to this new asset class as the “old rules” governing the incumbent financial system are often poorly-suited to the digital asset space. Izzy Klein, the co-founder of Klein/Johnson Group, is also closely monitoring how Congress plans to tax cryptocurrencies. And managing director at lobbying firm Cozen O’Connor Public Strategies, Patrick Martin, is developing a regulatory framework that fosters lawful conduct while enabling cryptocurrency and blockchain innovation. Countries such as Switzerland, Portugal, and Canada as well as US states like Wyoming and Texas have endeavored to provide regulatory clarity with the aim of fostering the development of the crypto industry in their region.
Once in place, these measures could pave the way for institutions with trillions of dollars worth of assets under management to add cryptocurrencies to their portfolios. This is one of the main reasons why Katie Stockton, the founder, and managing partner of Fairlead Strategies, LLC, believes that investor adoption of crypto is at “the very low end of that curve that could accelerate to the upside.”
Likewise, JMP Securities said that blockchain technology has hit “escape velocity,” making it difficult for its progression to slow down. The investment banking platform analysts Devin Ryan and Brian McKenna maintain that the “crypto-economy could represent the biggest innovation of our lifetime.”
Although some see Bitcoin as the clear “winner” given the institutional adoption for the world’s largest digital asset by market cap, it is naive to dismiss the use cases that smart contract platforms and other utility tokens have to enable an extensive universe of decentralized applications. This is why Index Funds are among the top choices for investors as they minimize risks through broad diversification and reduce the research burden faced by investors.
For the long-term investor, Invictus Capital offers an array of high-performing Index funds including the Crypto20 (C20) Index fund. C20 was the world’s first cryptocurrency-only tokenized index fund which revolutionized investing in the crypto space. The Fund gives investors exposure to a diverse portfolio of the top 20 cryptos by market cap in a single, tradable token that can be liquidated at any time through the Invictus Investor Platform. Invictus Capital has pioneered the next generation of index funds. The remarkable performance of the Crypto10 Hedged (C10) Fund (852%) and C20 (452%) since their inception have shown that crypto index funds have a bright future ahead.