Cryptocurrencies have taken the world by storm, especially with the latest bull cycle on the market. Not only has crypto become a hot topic in the news, but many new investors emerged on the market that wants to obtain crypto.
And this is one of the reasons why the crypto trust funds were created as a result of the newfound interest in crypto. If you’re looking to invest in crypto and you’re not sure what the crypto trust funds represent and why they have risen in popularity, here will provide a list of the main factors that triggered the rise of crypto trust funds.
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Crypto Trust Fund –Definition
Crypto trust funds are similar to other investment trust funds. Basically, a crypto trust fund is publicly listed as an institution that invests in crypto assets on behalf of its accredited investors. Moreover, when you are investing through a crypto trust fund, as an investor, you own shares from that specific currency. For example, if you added Ethereum to your portfolio, then you are essentially bought Ethereum’s shares for that crypto trust fund.
Safe Trading Process
The crypto trust funds conduct the entire process of trading and storage of the crypto asset, so you as an investor don’t have to worry about the storage of your assets or the ideal market conditions for placing an order because that is all facilitated by the chosen trust fund. However, every crypto trust fund, based on its policy, charges an annual fee for its services, and that’s an important factor that needs to be taken into consideration when you’re comparing different crypto trust funds.
This is why, if you’re an individual investor and you’re looking to diversify your portfolio and add cryptocurrencies, it is maybe a better idea to directly invest in crypto as there are numerous online trading platforms that don’t charge them high commission fees for trading. For instance, if you want the e-Yuan your portfolio, then a great trading app to consider is the Yuan Pay App.
This cutting-edge trading platform uses top technologies in order to offer the best options for the users regardless of their experience in trading. Furthermore, it is predicted that the e-Yuan will become one of the largest cryptocurrencies in the market and even surpass Bitcoin’s value. So, if you want to invest in one, it’s important to register on the right platform now. Otherwise, you can become a member here by depositing $250.
Hedge Against Inflation
Another reason why accredited institutional investors are investing through crypto trust funds is that some cryptocurrencies are deemed as a good hedge against inflation. Even though virtual currencies are considered volatile, most cryptocurrencies are decentralized.
In other words, most cryptocurrencies are not affected by various financial market events and conditions such as unemployment, financial crisis, political instability, recession, and other events that negatively affect the value of traditional assets and currencies.
Hence, investors perceive investing in crypto as a way to diversify their portfolio, while specific cryptocurrencies like Bitcoin are treated as a hedge against inflation. This was further proved with Bitcoin’s latest bull cycle, which happened during 2020- 2021 when the global financial market faced a lot of difficulties; however, Bitcoin’s value kept rising.
Higher Price
Another benefit of investing through the crypto trust fund is that the crypto trust fund, based on the current demand for cryptocurrencies in the fund, can sell the shares from the cryptocurrency at a higher price than the general price of the crypto market.
But, this also means that based on the demand for the virtual currencies from the trust fund, it can sell the shares at a lower price than the price of the market. Overall, there are great benefits of investing through crypto trust funds, but still, it’s important to have a good understanding of your long-term financial goals.
