Total Crypto Market Cap Token

Cryptex Finance

Authored by Slishyslice and mkatx5As an investor, you are likely aware of the traditional options you have when deciding what positions to take up. Just a few examples available on the traditional market are stocks, real estate, and physical assets like gold and art. Times are changing, though. The world of investing is being turned on its head with the emergence of cryptocurrencies as a viable wealth-building tool.Savvy investors have known it for years. Young people are diving into cryptocurrency as if their lives depended on it, and the largest governments in the world are deliberating on just how to handle crypto assets. The change in the world of investing has occurred in such a short time, that many skilled investors have still not figured out what cryptocurrencies even are.<h2 id="header-0">The Writing on the Wall</h2>Consider a quote from Michael Sonnenshein, the CEO of Grayscale Investments, who noted that “Over just the last 12 to 18 months, the asset class has really turned the corner as some well-known and experienced investors have publicly come out in support of crypto…”It doesn’t stop at individuals though: corporations, such as Tesla, have embraced crypto as an asset class worth keeping on their balance sheets as a reserve asset. The signals are so clear that the investment community is now clamoring to get into the cryptocurrency ecosystem as they explore volumes of history and charts on the field.These days, the most famous of investors, like Ray Dalio and even the heads of JP Morgan, have begun to change their once-negative tunes about Bitcoin and other cryptocurrencies. However much they hate being wrong, they know when to cut the charade and open their eyes to the writing on the wall. Famous investors of the past few decades who have failed to see the benefits of cryptocurrency from a wealth-building viewpoint have lost airtime (and net worth) not only to those in their class who have changed but to new entrants to their class who now appear on Bloomberg and <a href="https://www.cnbc.com/video/2021/07/20/pro-watch-cnbcs-interview-with-ftx-founder-sam-bankman-fried.html" rel="noopener noreferrer nofollow">CNBC</a> in their stead to talk about cryptocurrency.This acknowledgment of cryptocurrency as an asset class worth investing in by financial institutions is an important indicator that the existential risk for crypto assets is behind us. In other words, the total market cap of all crypto assets will maintain a value greater than zero. Consider the trend line of the total cryptocurrency market cap chart since 2014:Note: Log scale is used to smooth fluctuations caused by market cycles.<h2 id="header-1">The Cryptex Hypothesis</h2>A position based on the <a href="https://finance.yahoo.com/quote/%5EGSPC/chart/#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--" rel="noopener noreferrer nofollow">S&amp;P 500</a> over the same period of time above would have seen about 300% growth.A wise investor thinks on the margins. What marginal utility can you, as an investor, gain from investing in cryptocurrency? The answers are broad and still relatively vague but are being cleared up more and more quickly as time goes by. As a result of the lingering opaqueness in what marginal utility exists for active crypto investors, the necessity for a bridge or gateway into the crypto space has emerged for curious investors to gain exposure without suffering from wild price volatility. This is where index tokens come into play.The hypothesis at cryptex.finance is that individuals can derive significant benefit from a non-zero allocation to cryptocurrency, which they may currently be underexposed to. Rather than committing to a single token, it will benefit under-initiated crypto investors – especially those with little to no experience with the asset class – to gain exposure through an index token, such as Cryptex’s own $TCAP.<h2 id="header-2">What Is an Index Fund/Index Token?</h2>As a quick refresher, here’s how Vanguard describes an index fund:<ul><li>An index mutual fund or ETF (exchange-traded fund) tracks the performance of a specific market benchmark—or &#34;index,&#34; like the popular S&amp;P 500 Index—as closely as possible. That&#39;s why you may hear people refer to indexing as a &#34;passive&#34; investment strategy.</li><li>Instead of hand-selecting which stocks or bonds the fund will hold, the fund&#39;s manager buys all (or a representative sample) of the stocks or bonds in the index it tracks.</li></ul>In essence, an index fund aggregates performance data from a basket of assets within a single asset class. For example, the TCAP index token from Cryptex includes all cryptocurrencies in its basket of assets. The index itself becomes an investment opportunity since an investor may expect an entire asset class to accumulate value and would therefore want to take a broad position in that asset class.For a visual representation, check out coinmarketcap.com, which offers an interactive chart that depicts major cryptoassets by market cap. This view gives an approximate understanding of the underlying assets that make up the cryptocurrency asset class, as well as the change over time in the relative weighting of each asset within the index.<h2 id="header-3">Overall Benefits of Using Index Funds</h2>Vanguard also describes the benefits of allocating a portion of your portfolio to an index fund versus hand-picking individual stocks and bonds.<ol><li>First, investors can lower their exposure to risk by having greater diversity in their portfolios. Due to the variegated nature of the basket of assets within an index, they are naturally diverse. Therefore, depending on the number of assets within the index and their respective weights, if a single asset performs poorly, losses are minimized. If an investor were to hold just the poorly performing asset outside of the index, their portfolio would take a much greater hit. Considering how common it is for cryptos to lose over 90% of their value in a short time, this protection seems quite worthwhile.</li><li>Second, the tax burden is reduced. Index funds don&#39;t change their stock or bond holdings as often as actively managed funds. This often results in fewer taxable capital gains distributions from the fund, which could reduce your tax bill.</li><li>Third, investors incur far lower costs to invest in an index. All index funds have professional portfolio managers. What they don&#39;t have is the need to pay more for the expertise and time it takes to hand-select stocks or bonds for each fund.</li></ol>In addition to the benefits outlined by Vanguard, investing in index tokens eliminates the need to do heavy due diligence on each asset. Researching individual crypto assets is a time-consuming process that may require technical knowledge which investors would prefer to avoid.Furthermore, Americans who trade crypto assets trigger a taxable event with every trade, which they may want to avoid by taking a position in an index token. When the portfolio manager adjusts the index, the individual investors do not trigger a taxable event.Each of these benefits also applies to index tokens, which derive their value from the aggregated price of their respective index. In the case of TCAP, price is derived from the total market cap of the cryptocurrency market as aggregated by Cryptex.<h2 id="header-4">Drawbacks of Index Tokens</h2>It should be noted that there are drawbacks to investing in index tokens. Just as the index protects investors from dramatic short-term drops in price, there is an equal limit to the positive growth an investor has exposure to. Considering the regular occurrence of cryptocurrencies that may pump 100x, the index limits the amount of growth of one’s portfolio.Index tokens offer exposure to the long-term upside of crypto assets while reducing, if not eliminating, the risk of an asset becoming worthless. These index tokens are an exciting tool for investors to consider when designing their personal portfolio&#39;s asset mix.<h2 id="header-5">TCAP by Cryptex</h2>$TCAP is the ticker for the Total Market Cap token from Cryptex Finance, which is designed to give investors accurate, real-time price exposure to the total capitalization of the cryptocurrency market via a single, synthetic asset.TCAP aggregates data from various price oracles to determine the median value of the entire market cap for cryptocurrencies, then bridges the value on-chain through an audited Chainlink Smart Contract. Chainlink creates the most reliable and respected price oracles in the cryptocurrency industry to date.Cryptex encourages new crypto investors to explore their options with TCAP as a means of becoming initiated to the crypto space. Those who want to take a position with the TCAP index token can do so by market buying on <a href="https://www.notion.so/sushi.com" rel="noopener noreferrer nofollow">SushiSwap</a>, or by minting TCAP directly on <a href="https://www.notion.so/cryptex.finance" rel="noopener noreferrer nofollow">cryptex.finance</a> by depositing ETH or DAI into the protocol <a href="https://app.cryptex.finance/" rel="noopener noreferrer nofollow">https://app.cryptex.finance/</a>.You can find other crypto index tokens on Defi Pulse and Bitwise 10 Large Cap crypto index. Their indexes generally include smaller, specialized baskets of cryptos suited towards a single sub-class. That, of course, carries its own set of pros and cons.Whether you are new to crypto or are looking for a solid hedge to your more volatile positions, index tokens can be a great investment to make. They will give you broad exposure to crypto while minimizing the amount of work and risk. Don’t miss out on this piece of the puzzle.Sources<ul><li><a href="https://www.goldmansachs.com/insights/pages/crypto-a-new-asset-class.html" rel="noopener noreferrer nofollow">https://www.goldmansachs.com/insights/pages/crypto-a-new-asset-class.html</a></li><li><a href="https://coinmarketcap.com/charts/" rel="noopener noreferrer nofollow">https://coinmarketcap.com/charts/</a></li><li><a href="https://investor.vanguard.com/index-funds/what-is-an-index-fund" rel="noopener noreferrer nofollow">https://investor.vanguard.com/index-funds/what-is-an-index-fund</a></li></ul>Want to get involved? Check out:<ul><li><a href="https://cryptex.finance/" rel="noopener noreferrer nofollow">&#x1f465; Cryptex - Creators of TCAP and CTX</a></li><li><a href="https://cryptex.finance/#community" rel="noopener noreferrer nofollow">&#x1f449; Join the Cryptex Community</a></li></ul>DisclaimerCryptex.finance is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by Cryptex.finance are from the personal research and experience of the owner of the site and are included as educational material. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Indexing Crypto: The Missing Piece?

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