Both Bitcoin and Ethereum – the two most popular cryptocurrencies, have been soaring this year.  If you had invested in either at the beginning of the year, you’d have made a pretty penny.  Maybe not the huge amounts that had you invested right when either currency was just starting out, but with returns in the X00% range its still amazing.

So it’s no surprise that eToro, the social trading platform, has launched a new Copyfund for Crytocurrency.

A copyfund groups together a number of assets and allows you to invest in them in them as a whole.  For example there are Copyfunds for the “Big Tech Stocks” or “Warren Buffet’s Investments”.  It sort of like investing into a hedgefund, but with more flexibility – you’re able to buy in or out at anytime.

The CryptoCurrency CopyFund

This new cryptocurrency fund invests in Bitcoin and Ethereum.    65% of the fund is made up of bitcoin and the rest is ETH.

The fund has only been operating for the past couple of months but already it has made a return of 145%, which is kind of insane.  That’s obviously because of the huge jump in value of the coins over the past 12 months.    Will the price continue to rise?  Who knows?

Why not invest directly

So what’s the advantage in investing in the copyfund as opposed to opening Bitcoin or Ethereum trades manually on etoro?   The main advantage is the rebalancing that happens once a month.    It will be interesting to see if more digital currencies are added to etoro to be traded in the future.  I assume these will also be added to copyfund.  At the moment, there isn’t any major advantage to just opening a manual position on eToro.

Remember on eToro you are trading CFDs, which track the price of the underlying asset, and not trading the asset itself.  This allows super fast execution, no commissions (apart from the spread), and ability to short or sell an asset, to profit when the price dips.

Why would you invest in this copyfund

You’d invest in this copyfund only if you believed that the price of Bitcoin and Ethereum will continue to rise.  How far bitcoin will rise is a hotly debated topic.  Some people I’ve spoken to, believe because of the limited supply, the price may eventually be worth $1,000,000.  Other people I’ve spoken to think the opposite and that it’s a lot of hot air.    eToro gives this fund a risk score of 6 which is quite high.  TBH I would give it a score of 8.  Sure there could be a huge upside, but their is a lot of risk.

Personally I’m invested in both BTC and ETH, so obviously I’ll profit if the price continues to rise, and I’m fairly biased.  But I don’t pretend to believe I can predict the future price.

This is another cool copyfund on offer from eToro and a good innovation.  You can check out some of the other copyfunds I find interesting.  And if you don’t want to plonk down any actual cash, you can pretend you’re investing in the copyfund using a free virtual account on etoro.

Find out more about the CryptoCurrency CopyFund Here