It seems we’ll never have stop talking about ETFs.
Being physically backed is the claim to fame for the VanEck / SolidX Bitcoin ETF, so it will be interesting to see how different this ETF application is and if it stands any chance of being approved.
Speaking of index funds, I want to cover a cool way to manage your assets I discovered.
Now, according to Investopedia, the goal of an index fund is “to provide broad market exposure, low operating expenses and low portfolio turnover. These funds adhere to specific rules or standards (e.g. efficient tax management or reducing tracking errors) that stay in place no matter the state of the markets.”
Essentially, by using index funds, you spread out your risk exposure and help yourself stay as level as possible on days like today.
Not to mention, generally speaking index funds tend to have better results compared to an actively managed portfolio when management fees and expenses have been accounted for.
That’s still being tested in the crypto industry as managed funds, such as those on Genesis Vision, are doing comparatively very well considering the bear market.
But, in an industry as risky as crypto, I think it’s imperative that you considering reducing your risk by diversifying and rebalancing.
So, what’s cool is that there’s a platform that will do that for you: Shrimpy. Now, Doc covered Shrimpy a few months ago after they reached out to us asking for us to show people their rebalancing platform. But, rebalancing is a tricky business in a bear market, and I think a lot of people passed on Shrimpy once they saw it losing them money.
It should be pretty clear that there’s not going a “fire and forget” solution for your portfolio. If it was as easy as turning on the money printer, then everyone would be doing it.
That said, there’s still some interesting things going on with Shrimpy’s platform.
With Shrimpy, you can create an automated cryptocurrency index fund. Their rebalancing features will automatically conduct trades based on your desired portfolio strategy so you don’t have to.
Once creating an account, you can connect to your exchange account via API key. They support Coinbase Pro, Binance, Bittrex, KuCoin, Poloniex, and Kraken.
After that, it’s simply a matter of creating an index by selecting the types of assets you’d like hold and your rebalancing period. If you wanted to, you could tell it to rebalance every hour where Shrimpy will perform trades to maintain your desired asset ratios.
So, if you want to keep your portfolio balanced on several assets, then maybe this is a platform worth checking out. Make sure you understand what you’re doing, and that Shrimpy is not a trading bot. It will execute trades on your behalf, but it’s not going to be buying and selling to maximize returns like a trading bot would. It’s going to buy and sell to rebalance, which is a different strategy.
You can check out their medium article here: https://medium.com/@ShrimpyApp/cryptocurrencies-index-funds-9bbad17f1e2c