What Is a Crypto Investment Fund?
Traditionally, people have sought to make their money work for them by placing it in a high-interest savings account, buying property or investing in the stock market. This latter avenue can be divided into variable and fixed income ventures, with the latter offering a pre-agreed rate of interest to be paid during or after the fund reaches maturity.
Finding value in such funds is already a difficult proposition in today’s current climate, but conventional fixed income funds also carry with them a number of other disadvantages and complications. Step forward the humble crypto investment fund, which can solve these problems and offer an array of its own advantages in one fell swoop.
What are crypto fixed income funds?
Crypto fixed income funds have emerged as a viable alternative to conventional investments which can offer participants substantially higher returns on their investment. There are three main ways in which these funds function: via custodial lending platforms, via lending directly to traders involved in crypto exchanges and via non-custodial lending, also known as decentralised finance (or DeFi).
The way in which these systems work is by allowing individual investors to make their assets available for borrowing. As lenders, they can earn interest on cryptocurrency that would otherwise sit inactive in their digital wallets and suffer from the whims of the market fluctuations. Meanwhile, borrowers can access a raft of benefits from using them, too.
Solving problems
One of the biggest issues facing borrowers in the crypto sector today is the high threshold of collateral which they must put up to access the funds they desire. What’s more, they often face a limited choice in their collateral, meaning they do not have a whole lot of wiggle room for conducting the transaction on their own terms. Meanwhile, both borrowers and lenders alike are at the mercy of fluctuating interest rates, while the latter must also take a more hands-on approach than they might like if they are to get the best return on their investment.
The crypto fixed income fund offered by SmartCredit.io can tackle those issues and more. For starters, it aims to make borrowing available to as many people as possible by lowering the bar for collateral requirements and widening the choice of collateral to borrowers. Moreover, it uses a fixed income model to negate the fluctuations of market interest rates, while the automated service means that lenders do not have micromanage their investments.
Passive income
As such, lenders can benefit from a passive income stream and find lucrative yields in the crypto market. All that’s required from them is to put up the capital and adjust their preferences in terms of lending conditions and the system will automatically invest their assets and manage their fund, all the while earning much higher rates of interest than are available elsewhere. It couldn’t be simpler.
Meanwhile, borrowers also benefit by being able to access credit more readily and more easily than before. As such, a crypto investment fund makes good financial sense not just for the investors, but for those who take advantage of their excess capital via lending, too.
Cryptocurrency is here to stay – and crypto investment funds offer a lucrative way to make your money work for you, all the while not neglecting the needs of borrowers in a hostile climate.
The article does not contain investment recommendations, or recommendations to use the service described in this article. All the opinions expressed express exclusively the personal opinions of the author and the respondents. Any activity related to investing and trading in the markets carries risks. Make your own decisions responsibly and independently. Neironix is not responsible for the safety of your investment and does not make any recommendations
Published at Mon, 31 May 2021 17:26:00 +0000
