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.
A CopyPortfolio groups together a number of assets and allows you to invest in them in them as a whole. For example there are CopyPortfolios for the “Big Tech Stocks” or “Warren Buffet's Investments”. It sort of like investing into a hedge fund, but with more flexibility – you're able to buy in or out at anytime.
The CryptoCurrency CopyPortfolio
This new cryptocurrency portfolio invests in Bitcoin and Ethereum. 67% of the portfolio is made up of bitcoin and the rest is ETH.
The portfolio 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 CopyPortfolio 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 CopyPortfolio. 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 CopyPortfolio
You'd invest in this CopyPortfolio 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 there 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 CopyPortfolio on offer from eToro and a good innovation. You can check out some of the other CopyPortfolios I find interesting. And if you don't want to plonk down any actual cash, you can pretend you're investing in the CopyPortfolio using a free virtual account on etoro.
Find out more about the CryptoCurrency CopyPortfolio Here
Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.