{"id":306935,"date":"2021-07-24T03:05:00","date_gmt":"2021-07-24T00:05:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds\/"},"modified":"2021-07-24T03:05:00","modified_gmt":"2021-07-24T00:05:00","slug":"just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds\/","title":{"rendered":"# Just HODL! Bitcoin and Ethereum outperform \u2018lower risk\u2019 crypto index funds"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a373bb06699a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a373bb06699a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds\/#Hodling_versus_crypto_baskets\" >Hodling versus crypto baskets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds\/#Ethereum_also_outperforms_DeFi_baskets\" >Ethereum also outperforms DeFi baskets<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Just HODL! Bitcoin and Ethereum outperform \u2018lower risk\u2019 crypto index funds <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>In the past two decades, index and exchange-traded funds (ETF) have become some of the most popular forms of investing because they offer investors a passive way to gain exposure to a basket of stocks as opposed to investing in individual stocks which increases risk of loss.\u00a0<\/p>\n<p>Since 2018, this trend has extended to the crypto sector and products like the Bitwise 10 Large Cap Crypto Index (BITX) tracks the total return of Bitcoin (BTC), Ether (ETH), Cardano (ADA), Bitcoin Cash (BCH), Litecoin (LTC), Solana (SOL), Chainlink (LINK), Polygon (MATIC), Stellar (XLM) and Uniswap (UNI). <\/p>\n<p>The ability to access multiple top projects through one weighted average market cap index sounds like a great way to spread out risk and gain exposure to a wider range of assets, but do these products offer investors a better return in terms of profit and protection against volatility when compared to the top-ranking cryptocurrencies?  <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hodling_versus_crypto_baskets\"><\/span>Hodling versus crypto baskets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Delphi Digital took a closer look at the performance of the Bitwise 10 and compared it to the performance of Bitcoin following the December 2018 market bottom. The results show that investing in BTC was a more profitable strategy even though BITX was slightly less volatile. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-07\/b8b986a9-7dfd-4dfd-a2da-4bc30ff49ded.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Bitcoin price vs. Bitwise 10. Source: <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.delphidigital.io\/\"><em>Delphi Digital<\/em><\/a><\/figcaption><\/figure>\n<p>According to the report, \u201cindices aren\u2019t meant to outperform individual assets, they\u2019re meant to be lower-risk portfolios compared to holding an individual asset,\u201d so it\u2019s not surprising to see BTC outperform BITX on a purely cost basis. <\/p>\n<p>The index did offer less downside risk to investors as the market sold-off in May but the difference was \u201ctrivial\u201d as \u201cBTC\u2019s max drawdown was 53% and Bitwise\u2019s was 50%.\u201d <\/p>\n<p>Overall, the benefits of investing in an index versus Bitcoin are not that great because the volatile nature of the crypto market and frequent large drawdowns often have a larger effect on altcoins. <\/p>\n<p>Delphi Digital said:<\/p>\n<blockquote><p>\u201cCrypto indices continue to be a work-in-progress. Choosing assets, allocations, and re-balancing thresholds is a difficult task for an emerging asset class like crypto. But as the industry matures, we expect more efficient indices to pop up and gain traction.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Ethereum_also_outperforms_DeFi_baskets\"><\/span>Ethereum also outperforms DeFi baskets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Decentralized finance (DeFi) has been one of the hottest crypto sectors in 2021 led by decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI) and lending platforms like AAVE and Compound (COMP). <\/p>\n<p>The DeFi Pulse Index (DPI) aims to tap into this rapid growth and the DPI token has allocations to 14 of the top DeFi tokens, including UNI, SUSHI, AAVE, COMP, Maker (MKR), Synthetic (SNX) and Yearn.finance (YFI). <\/p>\n<p>When comparing the performance of DPI to Ether since the inception of the index, Ether significantly outperformed in terms of profitability and volatility, as evidenced by a 57% drawdown on Ether versus 65% for DPI. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-07\/53aa47bd-a232-45fe-80d8-7abe507b9f2c.png\"><figcaption style=\"text-align: center;\"><em>Ether price vs. DeFi Pulse Index price. Source: <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.delphidigital.io\/\"><em>Delphi Digital<\/em><\/a><\/figcaption><\/figure>\n<p>While this is an \u201cimperfect comparison\u201d according to Delphi Digital due to the fact that \u201cthe risk and volatility of DeFi tokens are higher than Ether\u2019s,\u201d it still highlights the point that the traditional benefits seen from indices are not mirrored by crypto-based baskets.<\/p>\n<p>Delphi Digital said:<\/p>\n<blockquote><p>\u201cYou could\u2019ve just HODL-ed ETH for a superior risk-return profile.\u201d<\/p><\/blockquote>\n<p>For the time being, Bitcoin and Ether have proven to be two of the lower-risk cryptocurrency plays available when compared to crypto index funds that offer exposure to a larger number of assets.<\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/just-hodl-bitcoin-and-ethereum-outperform-lower-risk-crypto-index-funds\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Just HODL! Bitcoin and Ethereum outperform \u2018lower risk\u2019 crypto index funds &#8221; In the past two decades, index and exchange-traded funds (ETF) have become some of the most popular forms of investing because they offer investors a passive way to gain exposure to a basket of stocks as opposed to investing in individual stocks&#8230;<\/p>\n","protected":false},"author":1,"featured_media":306936,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvYTA2OWUwZjktY2QwMi00OTIxLWE3ZjUtZjZlOWYyMGRjOTJlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74862,75163,75378,75167,74863,74868,75849,74891,82239,74939,92498,75937,89215,88700,73785,70918],"class_list":["post-306935","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-bitcoin","tag-bitcoin-cash","tag-cardano","tag-chainlink","tag-cryptocurrencies","tag-defi","tag-etf","tag-ethereum","tag-index-funds","tag-market-analysis","tag-solana","tag-stellar","tag-sushiswap","tag-uniswap","tag-markets","tag-sushi"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/306935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=306935"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/306935\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/306936"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=306935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=306935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=306935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}