Cryptocurrency fever is gaining momentum. Many are waiting for continued growth, but some are confident that cryptocurrencies are in a bubble that will burst along with the entire blockchain market. Understanding these kinds of behaviors are imperative to for traders who do not want to lose all of their money. In traditional trading, investors balance risk with hedge funds. In the crypto-world, the role of such funds is played by CTF (Coin Traded Funds).
The Token Fund Leads CTFs
Buying and safely storing a wide variety of digital assets can be a daunting task, but especially for beginners. Sometimes it is difficult to understand all the technical nuances and to constantly monitor the market. This is especially true with the sheer number of new altcoins and the various developments in already existing coins. Each altcoin is unique because it is based on a specific business model. This means that the value of the altcoin often corresponds to the business acumen, vision, and use cases of the coin, but interpreting that value can be challenging to newcomers. Recently, a lot of “empty” cryptocurrencies began to appear on the market. These are based on no viable business models and therefore have little meaningful growth. To understand the situation, a complete immersion in the market is necessary: news tracking and in-depth analysis of projects.
Rationality and cryptocurrency markets are strangers to one another. Often, the cryptocurrency market is fickle and subject to considerable psychological influence. This usually causes high volatility of individual currencies. It is why some altcoin you have never heard of can explode overnight then lose literally 90% of its value in 30 minutes. So what can traders -especially new ones- do to protect themselves?
Building a diverse portfolio is one way that investors generally protect themselves from uncertainty in markets. For cryptocurrency, his could be done with the help of Coin Traded Funds. CTFs are a new type of investment fund. The fund’s portfolio consists exclusively of cryptocurrency assets (tokens), such as Bitcoin, Ether, Dash, Ripple and others.
The balance of The Token Fund’s portfolio allows investors to avoid high risks of investing in individual cryptocurrencies. This means investors earn on the growth of the economy of the blockchain as a whole. Such funds allow you to invest in a whole set of cryptocurrency assets, for which you only need to buy The Token Fund’s token. This is not unlike an index fund or a hedge fund in traditional markets.
We all know how high the level of volatility in this market. The Token Fund’s managers respond to the market as a whole to maximize the earning potential of token holders. Market volatility is one of the greatest barriers to entry for new investors. CTFs like The Token Fund focused on fixing that issue.
This is a sponsored post and does not necessarily represent the views or opinions of The Merkle employees. This is not trading or investing advice, always conduct your own independent research. Due diligence is your responsibility.
from The Merkle