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Cryptocurrency ETF Equivalent For Passive Investing

Summary

C20 is a passive index fund.

Most traders cannot outperform respective beta.

C20 is currently trading below it's net asset value.

"CRYPTO20 is an autonomous crypto-only index fund that tracks the top 20 cryptocurrencies in the same way the S&P500 tracks the top 500 US company stocks. C20 is the fund’s token, and represents an investor’s share in the fund. Token-holders are able to liquidate the C20 token for their share of the underlying assets via the smart contract"

From fact-sheet: 

"CRYPTO20 is invested in the top 20 cryptocurrencies by market capitalisation, with weekly rebalancing. A maximum component weighting of 10% is utilised to prevent a single asset (and thus single source of risk) from dominating the portfolio."

Annual management fee is reasonably low (compared to crypto hedge fund) - 0.5% flat fee. Additional benefit of holding this token is ability to participate in staking currencies (for example Dash or NEO) since Dash masternode requires significant investment. Staking returns are added to weekly rebalance reducing the net fee effect. 

Underlying assets 

Ethereum 14,639.00 $3,086,448 11.55%
Stellar 10,990,970.00 $2,722,764 10.19%
Ripple 5,672,295.00 $2,703,421 10.12%
EOS 480,423.00 $2,615,391 9.79%
Bitcoin 383.00 $2,561,257 9.59%
Bitcoin Cash 5,573.00 $2,540,495 9.51%
Litecoin 34,069.00 $1,858,390 6.96%
Cardano 15,266,898.00 $1,194,089 4.47%
Monero 9,606.00 $1,038,952 3.89%
TRON 38,178,859.00 $930,762 3.48%
IOTA 1,641,306.00 $855,228 3.20%
Dash 4,906.00 $808,600 3.03%
Binance Coin 68,689.00 $688,451 2.58%
NEO 38,418.00 $644,477 2.41%
Ethereum Classic 61,848.00 $609,750 2.28%
NEM 5,274,467.00 $509,830 1.91%
VeChain 32,697,212.00 $385,467 1.44%
Zcash 2,923.00 $344,508 1.29%
Dogecoin 72,775,187.00 $337,531 1.26%
Bitcoin Gold 10,336.00 $278,344 1.04%

as in 17 October 2018 

Performance vs Ethereum or Bitcoin

NAV premium chart 

Source: https://c20.nils1.tk

Currently NAV is roughly ~$0.68773 while it's possible to buy this token for ~$0.648830 on the HitBTC exchange (about 5% arbitrage spread excluding fees). Keep in mind that recently Tether trading exchanges have positive bitcoin premium which is bad sign

 

To execute such trade one would need to buy bitcoin or ethereum for USD on the exchanges using USD, then send it to hitBTC and withdraw tokens from the exchanges to the separate ethereum wallet. Opportunity to earn 5% from arbitrage may be tempting but one needs to remember that trading crypto is giving you counterparty risk (for example at MtGox bitcoin was trading at premium before collapse) 

Investment strategies combined 

- value investing: right now the coin trades slightly below the NAV (Net Asset Value) as some people may prefer to sell coin in exchange instead of using NAV redeem option directly from operators: https://crypto20.com/en/portal/withdraw/

- passive low cost: buying crypto20 isn't related to recently popular investment thesis like bitcoin maximalism, fat protocols or appcoins - since it's tracking correctly whole coinmarketcap the downside or upside from concentrated portfolio is reduced. 

Related: Market Narratives Are Marketing: Introducing The Crypto Narrative Index

Availability on exchanges: 

- this token may be bought from IDEX or forkdelta without having to deposit money to cryptocurrency exchange. 

# Source Pair Volume (24h) Price Volume (%)
1 Bibox Bibox C20/ETH $33,064 $0.660553 0.00%
2 Bibox Bibox C20/BTC $21,074 $0.658440 0.00%
3 HitBTC HitBTC C20/ETH $5,167 $0.648830 7.54%
4 HitBTC HitBTC C20/BTC $5,088 $0.667696 7.43%
5 IDEX IDEX C20/ETH $4,135 $0.563660 6.03%

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.