What is eToro’s Crypto CopyFund and How Does it Work?
Unless you’ve spent the last two years on a desert island, you probably heard of Bitcoin. Whether you’re a fan or a naysayer, no one can ignore the impact it, and similar cryptocurrencies have had on the global conversation in recent years. However, Bitcoin’s price quite a rollercoaster ride: It fell by over 50 percent in value during the first three months of 2018, making that its second-worst quarter on record. Its worst three-month drop was in 2011 when its price fell by 68 percent, from $16.1 to $5.14, during that year’s third quarter.
Still less than a decade old, the number one cryptocurrency surged to an all-time high of nearly $20,000 in mid-December. However, fears of regulatory uncertainty, among other factors, have seen bitcoin and other cryptocurrencies declining in value. Bitcoin is currently trading at just below $6,650, a figure it hasn’t seen since November 2017.
For the moment, the market is struggling to gain momentum, yet interest in the sector is still going strong. Just ask eToro, the global trading and investment platform that specialises in cryptocurrencies. The company produced this video aimed at highlighting the number one cryptocurrency’s growth despite naysayers claiming otherwise:
Regardless of market worries, interest in the industry has never been greater. However, for an investor looking to get involved, it can be an extremely complex process. eToro is aiming to educate potential and existing users (here and here) on the cryptocurrency world. With a community that boasts more than nine million users, eToro makes it easy and straightforward for investors to start trading on its platform.
Regulated with the Cyprus Securities Exchange Commission (CySEC) and the U.K.’s Financial Conduct Authority (FCA), eToro is giving users the chance to invest in digital currencies through its Crypto CopyFund. Launched in July 2017, it offers a diversified portfolio, focusing on the top most traded digital assets.
Currently, the digital currencies on offer include Bitcoin, Ethereum, BCH, XRP, Litecoin, Ethereum Classic, Dash, and Stellar. Created by eToro’s investment committee, which also actively manages the CopyFund, the intention is to give investors the confidence to know that their money is being handled in an attempt to achieve maximum returns.
The weight of each asset within eToro’s Crypto CopyFund is decided proportionally, according to its relative share of the combined market cap of CopyFund’s components, with a minimum of five percent allocated to each crypto within the CopyFund. On the first trading day of each calendar month, the Crypto CopyFund is rebalanced by eToro’s investment committee (if needed). Additionally, the CopyFund has a limit placed on the daily invested amount. Once that limit is reached, it closes for new investors and reopens the following day. Investors are able to close their investment at any time.
On eToro’s platform, anyone can see how many traders are invested in the Crypto CopyFund. It is also possible to use the platform’s performance chart, which gives investors a view of the Crypto CopyFund’s past performance in a way that is easy to understand. Previous year’s past performances are also listed, in addition to an average risk score, a unique numeric value created by eToro to present risk in an easy-to-understand way, on a scale of 1 to 10.
With a huge cryptocurrency community that shares vital knowledge and helps each other get the most out of their money, eToro’s Crypto CopyFund aims to be the one-stop shop for investors’ needs when it comes to investing in a range of cryptocurrencies.
For those interested in joining eToro’s platform and taking advantage of a diversified portfolio that is easy to understand, simply go to eToro.com and sign up for a free account.
Your capital is at risk. Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance is not an indication of future results. The information above is not investment advice. CFD trading.