How Cryptocurrency Funds Offer Diversification and Less Volatility in the Crypto Market
- Samuel Feldman
- Aug 30, 2021
- 4 min read
Updated: Sep 5, 2021
Crypto funds are perfect for beginner crypto investors who don't know what to invest in or where to start.
(Image credit: ft.com)
Since the introduction of Bitcoin in 2009, the cryptocurrency market has been growing and expanding steadily across the globe. There are more than 1,000 cryptocurrencies that have emerged in the past decade. Main coins such as Bitcoin, Ethereum, and Doge have been crypto kings, with altcoins such as Steller, and Cardano approaching close behind. However, many investors, especially beginners, aren’t sure where to start or what to invest in. In the traditional stock market, exchange-traded funds (ETFs), mutual funds, and hedge funds exist to help diversify your holdings in your portfolio. These funds are able to hold a small percentage of many different companies to help balance and hedge each other so that when one stock drops, the others in the fund can uphold the value and lessen the blow of volatility. This same type of fund exists in crypto form. These funds are for those looking for a safer, less volatile investment while still investing in the main and altcoins. With crypto being known for its volatility, crypto funds can help minimize these fluctuations. Since you need a digital wallet and a crypto exchange to trade cryptocurrencies, putting your money behind crypto funds can be faster and safer for new investors.
One such crypto fund is AUXESIA. I was able to sit down with Rahul Parmar, Founder, and CEO of AUXESIA, a tokenized cryptocurrency hedge fund and asset management platform. Specializing in Blockchain, AUXESIA is able to put together the best elements from centralized and de-centralized finance into one fund. Through their own diversified cryptocurrency portfolio token, AUXESIACoin (AXZ), investors can hold a carefully selected diverse portfolio of cryptocurrencies, digital assets, and blockchain technology and projects.
(Image credit: auxesiacrypto.com)
What inspired you to start AUXESIA?
The crypto market crash of 2018 was what inspired us at the beginning. Bitcoin was falling 70%, and other coins were falling just as much, if not more. Our CTO, Kunall Parmar, was working on automated trading strategies at this time, and as a collective, we have had exposure and experience in cryptocurrency since 2014. His tools were performing very well, especially during the market crash. While this was happening, we witnessed many of our friends and families losing their entire life savings. So we decided to come together as a group to unify our strategies. We started working on a platform that utilized financial inclusion for everybody and not just individuals who have proficient knowledge of cryptocurrencies. This is where we got our motto from; financial inclusion, wellbeing for all.
How do you diversify the cryptocurrency portfolio, and in what do you invest?
We have 5 different diversification categories in our platform. The first category is the buy-and-hold category. It has 50% of the investment, which contains a basket of different cryptocurrencies hand-picked by the AUXESIA portfolio. This portfolio is then staged onto the decentralized finance platforms to generate yield. Every quarter we update the portfolio if needed. Currently, this category contains 30% Bitcoin, 40% Etheruem, and the rest makes up a bunch of small stakes in coins we deem special.
The second category is 25% of the investment, and this 25% is used as a hedged position against the first category. This is how we help lessen the blow of market crashes. The third category is 15% and is used for intraday trading since crypto can be traded 24/7. The last 10% is split into two categories. 5% will add liquidy in our own coin pools. This invites more investors to trade and hold our own AUXESIA coin. The last 5% is reserved for Initial Coin Offerings, IDO’s, market trends, and other interesting coins. We are also building an active community of our investors who often bring forward some interesting projects. If the project in question meets the internal guidelines we have created, this last 5% can be used to invest in the coin. Our strategy is designed to deliver exposure to all facets of the crypto space.
How does AUXESIA differ from other cryptocurrency hedge funds?
The key difference is our strategy and also tokenization. By launching our own coin, the AUXESIA coin, we have been able to simplify the entry and exit process of hedgefund while also creating a diversified cryptocurrency portfolio token that innovates the way investors invest in cryptocurrency hedge funds. Not only is liquifying parts of your portfolio into our own tokens possible, but the concept of trading whole portfolios has materialized into reality. This means that if you think someone has an undervalued portfolio, you can buy the full portfolio through AUXESIA coins. Our strategies are also unique through our room for innovation and diversification. We take advantage of the entire crypto market all in one token.
What does the future hold for AUXESIA?
We are looking to revolutionize the way investors will invest in cryptocurrency in the future. Our primary goal is to lessen the impact of market crashes and volatility of the market. We will continue to build on this and continue to provide a very high-quality value and investing service for our investors. Most importantly, we plan on bringing financial inclusion and well-being for all.
Rahul Parmar is the CEO and Founder of AUXESIA. Inspired by the suffering of his family and friends during the crypto market crash of 2018, Rahul vowed to bring financial inclusion and well-being to all in the crypto space.
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