Crypto Investing: Setting Boundaries Between Active and Passive Management

• The article discusses the dilemma of crypto investing, focusing on active and passive management.
• It provides 3 different perspectives on this dilemma, as well as questions pertaining to the BlackRock ETF application.
• The article also provides insight into how the asset class is maturing, as new tools are emerging to support client interest and help advisors navigate their path into digital asset investing.

Setting Boundaries: Defining Active and Passive Management for Crypto

Breaking down one of the key dilemmas in crypto investing can be done in three different ways. Plus: Questions spurred by the BlackRock ETF application.

Simple Buy-and-Hold Strategies

Simple buy-and-hold strategies provide a low cost way of passively holding cryptocurrency portfolios without having to actively manage them. This strategy may be suitable for investors who are not comfortable with frequent trading or do not have time to actively trade.

Automated Index Funds

An automated index fund is an investment tool that allows investors to replicate the performance of a basket of cryptocurrency assets with minimal effort. Investors can choose from a variety of indices, depending on their risk tolerance and invest accordingly.

Discretionary Management

Discretionary management involves a professional investor actively managing an investor’s portfolio according to their individual needs and goals. This type of investing requires more expertise than simple buy-and-hold strategies or automated indices, but it also gives investors access to more specialized advice and helps them achieve better returns.

Questions Pertaining To The BlackRock ETF Application

The BlackRock ETF application has sparked many questions about how this would affect future investments in digital assets, such as what regulations will be put in place? What measures will need to be taken by institutional investors? How will liquidity impact prices? These are all important questions which will require further exploration before any decisions can be made about whether or not this is a viable option for those looking to invest in crypto.