BitFund develops SA’s first diversified, flexible investment platform

SOUTH African cryptocurrency investment platform BitFund announced yesterday that it had developed the country’s first diversified and flexible investment platform meant to expose investors to index portfolios of more than 20 of the world’s largest cryptocurrencies.

The company said in a statement that BitFund had created three pre-specified portfolios that had been structured to remove the complication of selecting individual cryptocurrencies. There is the Balanced 10 Portfolio, which holds each of the top 10 largest cryptocurrencies weighted by their market capitalisations; the Equal 10 Portfolio, which holds each of the top 10 largest cryptocurrencies with equal weighting of 10 percent each; and the Capped 20 Portfolio, which holds each of the top 20 largest cryptocurrencies, weighted by their market capitalisations, with a maximum of 15 percent per cryptocurrency.

Founded by Joshua Miltz, Jonathon Ferrer, Bradley Goldman and Dean Joffe, BitFund’s single point of entry portfolio includes cryptocurrencies such as Bitcoin, Ethereum, Ripple, Litecoin, Iota, EOS, Cardano, Stellar and NEO, among others.

“In South Africa, the only safe and easy way to get investment exposure into cryptocurrencies is through buying Bitcoin and Ethereum and these are currently only available through a single exchange,” said Miltz.

“Most potential investors lack the technical knowledge and confidence to manually purchase the lesser-known cryptocurrencies on international exchanges, but BitFund makes it possible for them to do so.”

Experts predict that the total cryptocurrency market value could reach $1 trillion (R13.3trln) by the end of this year, “which is why cryptocurrencies are believed to be an attractive alternative investment option by many”.

Asked how this was possible considering that the current cumulative market cap of all the cryptocurrency is about $417 billion from about $800bn before the recent downturn, Miltz said: “A year ago to the day, Bitcoin traded at $2 500. A year later, after a multimonth bear trend, it is still trading at more than double that price. Bitcoin’s (and other cryptocurrencies’) adoption rates around the world continue to grow.”

He said that on more than 10 occasions in the past, the Bitcoin price had recovered after dropping more than 30 percent. For many who believed in the prospects of the technology and its adoption, a price recovery was inevitable.

Miltz said: “If we are to examine only the number of users that have adopted the technology, we can conclude that we are around the same period as the internet’s adoption. Is it a certainty that the cryptocurrency market value will reach $1trln by the end of 2018? Far from it – the market is clearly still in its infancy and has proved time and time again to be unpredictable. Is it possible? Most definitely.”

If the cumulative market cap rises just 25 percent from the peak, it would be able to hit the valuation of $1trln, according to a Smartereum.

Kraken Bitcoin exchange’s chief executive, Jesse Powell, said the main problem was regulatory concerns.

“If the regulatory concerns are not tackled soon, the number of traders, as well as investors in cryptocurrencies, could go on decreasing.

“This is the reason why proper regulatory framework, as well as trading mechanisms, need to be involved.”