source: schroders
Cryptocurrency is by far the most exciting asset class in the world right now. Historical 100,000% returns, uncharted technological territory, and mind-bending volatility offer once-in-a-generation opportunities to investors. But investing in cryptocurrency can prove to be a little too hands-on and risky for most investors.
New investment vehicles like PentaFund are allowing investors to enter into the crypto craze in a way that is similar to traditional investments, without having to worry about many of the technological hurdles, pitfalls, or downsides that exist in this space.
Why is Investing in Cryptocurrencies so Profitable?
You’ve probably read countless articles highlighting individual success stories of Bitcoin millionaires. It has been going on for years now, and will continue to do so for the years to come. So you may be wondering, “How are cryptocurrencies continuing to yield such massive gains years later?”
There are a few main reasons:
- Massive growth and development within the space as a whole
- It’s a market driven by regular people, not global firms
- High volatility and market inefficiencies can be exploited with near instant settlement times on the blockchain
- Value is uncorrelated with traditional assets
The blockchain (the technology that powers Bitcoin and other cryptocurrencies), is revolutionizing how we think about value and trust on the Internet. It’s proving to be the fastest growing and most important technological innovation since the Internet itself. Over the last few years, many individuals involved in the cryptocurrency sector have seen outrageous yearly gains.
However, the opportunities are even bigger for savvy investors. Cryptocurrencies can be traded instantly, 24/7, and with very little regulation. Most buyers and sellers in the market are everyday people, not large firms using supercomputers. These factors combine to create the volatility, market inefficiencies, and arbitrage opportunities that professional investors can utilize to gain substantial yields. The cryptocurrency crash that began in late 2017 may have been a horrible shock for new investors that had just experienced the idea of uncertainty and doubt (FUD) for the first time. However, educated investors saw it coming a mile away and had the opportunity to prepare for the upcoming market conditions.
The cryptocurrency market is entirely uncorrelated to traditional markets, therefore it is a great opportunity to diversify one`s portfolio in times where interest rates are at all time lows and the stock market appears to be overvalued.
So Why isn’t Everyone Doing it?
Despite the large scale media presence, the cryptocurrency market is still tiny on a global scale. There are many common barriers that withhold most investors from investing in cryptocurrencies. Some of the these reasons include:
- Scary, unpredictable, fast-moving market conditions
- A lack of understanding in blockchain technology
- Security, legal, and regulatory complications
A 24/7, volatile, unregulated marketplace creates an environment in which investors need to constantly be on the ball. Minimal safeguards are available to investors while most market analysis techniques prove to be efficient when the market can swing on a single tweet.
There’s also the mystery of a blockchain asset itself. Smart investors follow the “only make investments you understand” mentality, and will not get involved simply because they don’t understand the intricacies of blockchain technology and its constant evolution. Even if you do, the relentlessly expanding crypto market makes it nearly impossible for one to keep track of and analyze a multitude of cryptocurrencies in hopes of discovering the next big thing.
Cryptocurrencies have become a perfect target for hackers, therefore differing levels of security have proven to be necessary. The cryptocurrency asset class as a whole currently does not have a fraction of the regulation that banks and investment firms do. They need to protect clients, guard against hackers, and comply with anti-fraud regulations. Big investment companies have cowered away from the whole industry. Investors also need to handle the taxes themselves instead of receiving a clear gains and losses report from a broker.
The thought of navigating this Wild West market based on a complex new technology has put off most investors, despite the huge potential profits.
A New Way to Invest in Crypto
In traditional markets, investors have a plethora of investment vehicles that they can choose from in order to gain exposure to certain markets without having to micromanage all of the risks. Now, these investment strategies are entering the world of cryptocurrency.
PentaFund is a opportunity for investors to overcome the numerous challenges that face the cryptocurrency asset class. It is a cryptocurrency fund that focuses on ease of entry, transparency, investment selection, and sophisticated asset management. A way for investors to become exposed to the wide ranging opportunities of the crypto markets through sound investments.
How it works
PentaFund is a tokenized investment fund where Pentacore Tokens (PENT) represent the fractional stake of PentaFund`s Net Asset Value (NAV). This means that investing in PentaFund is as easy as buying a single token. You can realize profits by selling PENT Tokens directly back to PentaCore during its liquidity periods without penalty (up to 10% of the fund net asset value per quarter). Investors can also utilize a smart contract created by PentaCore for peer-to-eer exchange without penalty (must be from one KYC Verified Investor to another KYC Verified Investor). These features make PentaFund one of the most liquid crypto investment funds in the space. One can gain entry into the fund through their upcoming token sale.
PentaFund is structured in a way that is common for traditional investment funds. This allows investors to enter the crypto space with a investment vehicle similar to that of a hedge or mutual fund. It’s designed as a absolute return fund (reinvesting profits) with a simple fee structure:
- 2% annual management fee of all assets, regardless of performance
- 20% performance fee on profits using a high water mark
- Additional trading fees (not more than 1% per year)
For transparency’s sake, the PentaView Platform will allow investors to view the NAV (net asset value) of PentaFund as well as insights into the funds holdings.
Investment strategy
The idea is to allow investors to gain exposure to all of the opportunities of the crypto market such as exponential growth and extreme volatility — while at the same time avoiding the downsides of individual investments. To achieve this, PentaFund is actively managed and continually reviewed by their Fund Management Team to keep up with the evolving marketplace. PentaCore`s fund managers have created sophisticated management techniques and guidelines that properly inform all investment decisions. The fund aims for long-term appreciation through the application of asset management techniques that includes, yet is not limited to, derivatives, hedging, and selling short. There’s no blind herd mentality here, just highly experienced, industry-leading fund managers who are making calculated and researched decisions.
There is particular attention paid to protecting capital during market downturns, a staple of the blockchain world.
Benefits for Investors
This is a game changer for investors that have been hesitant to dive into cryptocurrency. Now, there’s a single product that can deliver:
- Easy entry
- Exposure to the massive returns of cryptocurrencies that are uncorrelated with traditional asset classes
- High liquidity and a guaranteed mechanism for making profits
- A simple platform to view insights into the funds holdings
About the author:
Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.