Stepping into the world of cryptocurrency requires us to have enough crypto assets with us. Those who have long been mining cryptocurrency are now having a lump-sum with them. However, for those who are new in this ecosystem, mining a substantial amount of cryptocurrency has become difficult due to the growing complexities of the mining algorithms. So how can newcomers build up their assets? This is where a crypto fund comes in! We’ve talked with experts from tokenbox.io in order to give you the details about the current crypto infrastructure, and the new products in this field.
A crypto fund is basically the managed capital of digital money that is available to the investors for replication. It serves as a bridge between a trader, who is creating the crypto fund, and the one who would happily invest into that fund. The ultimate goal of participating in a crypto fund is to gain crypto assets for both the parties.
Since cryptocurrency is trying to replace the fiat currency in the future, the crypto funds have evolved as the digital version of fiat currency. As this is a decentralized form of currency, it allows anyone to start a fund simply by introducing a new cryptocurrency. Consequently, several types of crypto funds have emerged with the purpose to satiate the appetite of investors and traders so that they can multiply their digital assets.
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Cryptocurrency Hedge Fund
Crypto hedge funds are one of the initial forms of crypto funds that have gained significant popularity among the masses due to their convenience. Like other hedge funds, they offer minimum risks with noteworthy profitability. The investors just have to pay a small fee if they want to participate in the fund. Today, numerous hedge funds allow an investor to capitalize their money and gain huge profits. Some of these include:
Cryptocurrency Mutual Fund
As the name suggests, crypto mutual funds are created from the investments of multiple investors that pool up their capital to the crypto buy-and-hold fund. In return, they are given a share in the fund (usually in the form of “tokens”). These funds serve as a wonderful option for startup traders who want to grow their digital assets. Popular mutual funds today include:
Cryptocurrency Index Fund
The growing popularity of cryptocurrency has led investors to begin trades in this currency in the same way as they do for fiat. Hence, the crypto index funds emerge as a way for the newcomers to break into the crypto stock market. Some growing cryptocurrency index funds include:
Cryptocurrency Investment Fund
Cryptocurrency investment funds serve as an all-inclusive platform for investors to capitalize their money all together so as to reap the innate benefits of a team effort. Crypto investment funds help you monetize your assets either to avail market advantages or to support the mining machinery. Such funds are mostly associated with higher risks, yet higher profit margins.
Some popular crypto investment funds include:
The Difference Between Crypto Fund And A Common Hedge Fund
Although the various types of crypto funds sound similar to those applied for fiat currencies, crypto funds have significant differences, owing to the nature of this currency. The most common type of fund for fiat currencies is hedge funds. Though we do have a form of crypto hedge funds being practiced currently, they are not similar to the common hedge fund.
Below we draw a quick comparison between common hedge funds and crypto funds.
||Common Hedge Funds
|The currency for crypto funds is decentralized
||Applies to fiat currencies
|Substantial risks in investment
||The risk is much lower
|Can earn you higher profits
||Due to limited risks, the profit margins are also low
|Volatility of assets is much higher
||Volatility is limited
|You cannot call your blockchain assets
||Call options are available for the assets
|The share of the funds is in the form of “tokens”
||The investors are given a direct share of the funds
|There aren’t any strict regulations for crypto funds
||Being a primitive method of funding, common hedge funds are fully regulated by laws.
Why Invest In A Crypto Fund
Although cryptocurrency is getting significant attention from the masses people, however, are skeptical about the genuineness and strength of this digital money. The investors are still a bit hesitant when it comes to investing assets in a cryptocurrency fund. One of the most common arguments which people present against the idea is the fact that this currency is still in its infancy. People are worried to invest their capital in such risky deals.
Nevertheless, there are certain benefits which you may enjoy after you invest in a crypto fund.
- The foremost benefit of investing in a crypto fund is that the cryptocurrency is going to be the currency of the future. Therefore, investing in such crypto funds will help you earn a secure future.
- Cryptocurrency mining has now become more complicated than it was in the past. Because of this, the rate of crypto mining is also much lowered due to the significant turnover of people towards cryptocurrency and the complications introduced in the mining algorithms. Thus, investing in crypto funds becomes a safe way to build up your assets.
- Crypto funds offer higher profit margins (though with higher risks). That is how you can earn more money by investing in such funds.
Why You Should Create Your Own Crypto Fund
After you are convinced to participate in cryptocurrency funds, the next thought popping up in your head is, ”Why should I create a separate crypto fund?” Well, those who have built their funds agree that starting off one’s own cryptocurrency fund provides several benefits.
- It is a convenient method to earn cryptocurrency without getting stuck in any complex mining algorithms.
- It is a safe way to earn cryptocurrency and break into the crypto market for newcomers.
- It requires less time and effort to build up your crypto assets with your own crypto fund as compared to any other method.
What Do You Need To Create Your Crypto Fund
Creating a crypto fund does not require much effort from you. You just have to ensure that you join the right platform from where you can find appropriate investors to begin your fund. The prerequisites for creating a crypto fund are:
- Your crypto wallet credentials.
- A platform according to the type of fund (mutual, hedge fund, index fund, etc.) you wish to create.
- A strategy to share your profits with your investors.
What Are The Possible Profits
The profit margins in cryptocurrency funds cannot be specifically predicted. This is because cryptocurrencies are highly volatile with a 20%± change in cost a day. Therefore, the initial investment and fund planning need to be carefully devised while keeping these fluctuations in mind.
The brighter side of crypto funds also lies in the same fact. The volatility of cryptocurrencies can generate great profit margins. The only trick is to keep an eye on the currency rates. When the rates are low, take the opportunity to grab your share, and when the prices begin to rise, then this becomes the best time to sell your assets and enjoy the profits. For instance, if you have purchased 300,000 Stratis last year at a rate of $0.01, then that initial investment of $3,000 would now have earned you approx. $1 million, all because the current rates increased to $3.5. This is how an investment at the right time can make you a millionaire within just a short time.
How To Create A Crypto Fund
The first problem, which beginners face before starting a cryptocurrency venture is the initial investment. They look out for someone who could lend them an initial investment in order to proceed. Realizing the need to fill up this gap, several investors and venture capitalists came up with a willingness to invest their crypto assets with you. Yet, it was still difficult for beginners to find such investors. To solve this problem, today there are several dedicated platforms that let these fund managers meet the investors. These platforms provide the opportunity to newcomers so that they can create crypto funds for them.
How would you step it up to begin your crypto fund?
- Plan out a strategy about how you are going to call for these funds. You can either opt for the “donations” to run your ICO campaign, or you can choose for an investment-based crypto venture.
- Identify an appropriate investment value for your fund.
- Time to materialize your plans! Step up to create a crypto fund by approaching the investors.
- Get ready to share the tokens with your investors in return for the cryptocurrency that they are investing in your campaign.
Crypto funds provide a safe way to all those who find it difficult to indulge in the complex mining procedures recommended by venture capitalists (VCs). Especially for the beginners who do not know much about the complicated algorithms; creating a cryptocurrency fund is a wise idea.
Planning Your Crypto Fund
The boom in the costs of cryptocurrency has attracted several capitalists who want to invest their assets with data miners. Devising an ideal fund management strategy to increase your blockchain assets rapidly, especially when you do not have significant assets with you, is a wise idea.
While planning for your crypto fund, you must focus on some basic questions that would pop up in your investors’ minds when they hear your “fundraiser” call. Such as,
- Why would someone be interested in investing with you?
- What would he or she get after investing cryptocurrency to your fund?
- How long will this cryptocurrency venture continue?
You should already have answers to these common issues when you start raising a crypto fund.
Remember, the goal of generating crypto funds is to add up your digital currency. Whereas the investors who agree to back you in the process also anticipate getting rewarded at the end of your campaign.
Creating Your Fund
Here is a quick guide on how you can proceed for your crypto fund management!
The Initial Coin Offering (ICO)
Starting a crypto fund is similar to offering the profit share to the investors in a company. Your Initial Public Offering (IPO) transaction forms the basis needed to attract investors towards your company. Therefore, you need to prepare a white paper agreement that discloses your project concept, duration, distribution of virtual tokens between you and the investors, and the goal of your ICO campaign.
Look Up For The Investors
In the next step, you need to find suitable investors who could lend their blockchain assets to you. The best method to find the appropriate investor for your crypto fund is to join online platforms.
After you run your ICO campaign, move ahead to share your tokens with the investors. It is the main thing in which your investors were interested in from the very beginning of your ICO!
The Traditional Crypto Fund Collection vs. The Newer Software Platforms – What’s The Difference?
Well, you already know about the cryptocurrency lenders and the VCs who are ready to invest their digital currency with you. Nevertheless, there are a few issues associated with these traditional earning methods in the blockchain ecosystem:
- It is difficult to find the lenders and venture capitalists who can invest their crypto assets with you on acceptable terms and conditions.
- Your quest for finding these investors may take time.
- You need to make separate marketing efforts when promoting your crypto fund.
Nevertheless, with crypto funds managed through software-based platforms, you do not need to worry about any of these problems. These platforms are powered by dedicated fund management software through which both the trader and the investor have mutually benefited. They just have to register themselves with these platforms and choose the desired trader/investor to collaborate with. The rest of the process is simple.
These crypto fund management platforms not only deal with the fund management but also handle the promotional activities for your fund. Moreover, KYC is not required in many of such cases as the software authorities already have the user’s entire data saved. This, in turn, saves time for KYC and fund promotion.
Here we give a quick view of what the differences are between the primitive methods of fundraising and the funds created through platforms.
|Traditional Crypto Collection
||Crypto Fund Creation Through Software
||No legal issues as the entire process is legitimate
|Efforts required for KYC
||No KYC needed since the entire user details are gathered in the software
|Separate fund promotions required
||Promotional activities handled by the software platforms
|Individual trader’s efforts needed to approach investors
||Investors can be easily approached
|Investors had to search for appropriate funds to invest in
||Fund traders are available to be approached by investors
Top 3 Software Platforms For Crypto Fund Management
With the rise of online crypto asset management platforms, such hindrances associated with conventional crypto fund management are being removed from the crypto exchange methods. These fund management websites provide a combined platform to investors and crypto managers. Some popular platforms include:
- Tokenbox.io – It is the number one solution for all cryptocurrency fund matters. Providing a platform to the fund managers and the investors alike, Tokenbox also takes care of any and all the legal issues related to the tokenization.
- ICONOMI – ICONOMI is established as a platform for digital asset management and is based on Ethereum smart contracts. It claims to serve as a podium for the digital asset array (DAA) managers and the investors in order to strengthen up the crypto economy.
- Melonport – Melonport declares itself as a system of tools that empowers the traders and the investors to set up their own plans for crypto funds. Within the predefined set of rules, the system offers decentralized services which are convenient for all participants of an ICO.
Tokenbox.io – The Platform For Crypto Asset Fund Management
Tokenbox.io started off as an infrastructure platform for both the investors and traders. The idea of launching this unique crypto fund software platform belongs to The Token Fund founders, Vladimir Smerkis and Viktor Shpakovsky. Tokenbox serves as a one-stop solution for all traders and fund managers looking for investors who could trust their skill and help them raise their crypto assets. As the name says, the traders and fund managers are provided with “box” solutions, empowering them to create their own funds. Likewise, it also benefits the investors in a way that it brings various traders on the same platform, making it easier for the investors to select any appropriate crypto fund for investing.
Although there now are several software platforms offering fund creation and management services, Tokenbox is undoubtedly matchless due to multiple reasons. ICONOMI and Melonport are two such forums that provide crypto fund management. But none of these matches the incredible features that Tokenbox has. Below is a list of services exclusively offered by Tokenbox.
- An ICO market.
- Open registration for any diligent funds and trader (instead of being selected by the platform (e.g., ICONOMI) or the fund being created by the owners only (such as for Melonport)).
- Compliance with legal regulations.
- Integrated analytic tools.
- A dedicated system of ratings for funds.
The first ever ICO is going to be held on November 14th, where Tokenbox tokens (TBX) will be generated. Previously, it was supposed to commence on October 24th. But, owing to the large number of token requests it received, it was decided that they must extend the TGE date until November 14th. You can easily join the private sale and take part in the initial token sale for this crypto fund. A single TBX token will cost 1 USD during the TGE, which will continue for 10 days.
Benefits Of Creating The Crypto Fund via Tokenbox
Among all the platforms offering cryptocurrency fund management services, tokenbox.io provides several advantages to the investors and the fund managers. It serves as a complete package for anyone who wants to participate in crypto funds with suitable conditions and beneficial services. Tokenbox.io takes care of all aspects that may hinder the process of smooth transactions between both parties.
- No Legal Restraints – Tokenbox.io takes care to protect its customers from legal issues that commonly hinder crypto transactions. It serves as a legitimate “umbrella” fund that paves the way for a seamless exchange of digital assets.
- No KYC Formalities – With Tokenbox.io, you don’t need to worry about KYC while interacting with the other party for crypto funds. It has a robust client verification system that ensures legitimate user profiles have all the necessary information.
- No AML Measures Needed – As Tokenbox.io has a strict verification system with all necessary details of traders and investors, it ensures that the users’ profiles are legitimate and that there is not even the slightest chance for misuse of money generated through this platform. Hence, the stress of employing AML measures are not required for Tokenbox funds.
- Multi-Currency Wallets – With Tokenbox.io, you can store all your digital assets in a single, universal multi-currency wallet.
- Investment Accepted Through Fiat Money and Credit Cards – To ensure the convenience of its traders and investors, Tokenbox.io also accepts payments made through credit and debit cards or fiat money. Likewise, they can also perform reverse exchanges from tokens to fiat money.
Promoting Your Fund
Once you step ahead to create a crypto fund, how would you go about attracting more investors? Effective promotion and marketing campaigns are essential for any successful business. The same applies principle applies to crypto funds. You need to promote your fund through various channels to gain more investors.
Effective Ways To Promote Crypto Funds
Marketing a cryptocurrency fund is a bit different from traditional online marketing techniques. Smart promotion is the key to creating a successful crypto fund. Your target audience, in this case, would be the potential investors and those fund traders who wish to join your forum. However, targeting a broader audience will not be a good idea. You are not going to use any spam techniques over here since your project is not, and should not be, spam.
Here we have a list of some efficient ways through which you can promote your crypto fund.
Professional Social Media Platforms
Social media sites have undoubtedly been a great help to online marketers. Whether it is about businesses, products, or websites, social media can play a significant role in its marketing. Now the cryptocurrency marketers have also made their way to social media platforms for promotional purposes. Whether it is Facebook, Twitter, LinkedIn, Quora, or any other site, you can find several groups dedicated to cryptocurrency related discussions only. Joining and actively participating in these groups will significantly promote your cryptocurrency fund.
Announce Your Crypto Fund On ICO Websites
If you are using the “crowdfunding” strategy for your crypto fund, then advertising your fund on various ICO related websites is a useful promotional technique. There are numerous ICO sites which display these ICO’s and fund adverts in a calendrical form. In this way, anyone who is visiting such sites (whether a trader or an investor) will likely go through your ad and take an interest in your fund. Moreover, it is likely that tech bloggers will cover these upcoming ICOs in their articles. This increases the chances that your ICO will be picked up in their writings, and consequently, marketed to a much broader audience.
Some of these websites are listed below:
Conventional Promotional Strategies
Another efficient method to promote your crypto fund is through the native means of online marketing, that is, through blogs and articles. Of course, blogs are a proven way to attract readership and potential customers for any business or brand. Then how would they be ineffective for such a trending technology of cryptocurrency? Today just about every other person, at any educational level and belonging to any field, is interested in knowing about cryptocurrency and the ways to earn this kind of money. So, promoting your crypto funds by informative articles or press releases will not only attract readers towards your blog but it will also persuade them to join your fund.
The Best Channels Where You Can Promote Your Fund
You might be wondering whether the ways mentioned above are genuinely useful for crypto fund promotion or not. Especially if this is your first time marketing your crypto fund.
Well, here we discuss the most effective channels through which you can promote your crypto fund both effectively and efficiently. These channels employ one or more of the methods mentioned above, hence proving the genuineness and productiveness of these marketing tactics.
Software Platform For Crypto Fund Such As Tokenbox
Creating a crypto fund through software platforms, particularly through Tokenbox, is also beneficial for promotional purposes. With a Tokenbox fund, you do not need to run a marketing campaign for your crypto fund separately. Such platforms automatically post your fund to various related websites as advertisements. It not only provides you an umbrella for fund management and investment but it also takes care of promotion.
Reddit is one of the most influential social forums that is continuously gaining more users every day. The growing interest of people towards Reddit has also made it a wonderful marketing opportunity. You can find several dedicated subreddits that deal with cryptocurrency and its related topics. Posting about your fund in one or more of such subreddits will greatly benefit your fund. Here are a few of the various dedicated subreddits for cryptocurrency.
Bitcointalk is also a popular domain among crypto fans. This is like a social media website where users can interact with each other regarding any new cryptocurrency and its related matters. Whether it is about Bitcoin or Altcoin, you will find several discussion forums over here. At the same time, users can earn cryptocurrency through this site without much effort. Bitcointalk.org also serves as a fantastic channel to promote your crypto fund if you want to attract more visitors and customers.
If you want to legally and securely create your own crypto fund, you only need to:
- Find your answers to the planning questions and set a clear goal
- Head to one of the crypto fund management platforms (for tokenbox.io you have the step by step guide explained by us)
- Start promoting your crypto fund on the platforms presented