If you’re a new investor in the cryptocurrency space, chances are that your options have been a bit overwhelming to say the least. Besides Bitcoin, there are over 1,000 other choices of cryptocurrency coins and tokens out there, known as alternative coins or “alt coins,” that investors have access to.
When it comes time to deciding on your first investment, or collection of investments, it can be difficult to narrow down your search to the coins and tokens you find most promising. It’s almost impossible for most of us to find the time to do a full, in-depth analysis of every project coming to market in the crypto world. Sure, you can always base your decisions off of advice from a friend or colleague, watch famous personalities on YouTube, or even just randomly select coins and hope for the best, but there has to be a better way, right? That’s where Digital Asset Arrays (DAA) come in to help. Keep reading and we’ll explain what they are and some of the well-known options out there for investors.
Digital Asset Arrays and Investment Funds: What are They?
We’ve all heard the old idiom before: “Don’t put all your eggs in one basket.” In finance and investing, that means investors are looking to mitigate risk by diversifying their assets. Simply put, when investing, we’re looking to spread our investments across multiple projects we think may do well, instead of putting all our resources into one project.
The idea is simple, yet highly effective for protecting against unforeseen failure. If you have all of your available capital invested into one coin and the project turns out to be less than impressive and the entire thing fails, you won’t lose all of your capital because your investment strategy has included spreading out assets to protect you from such a massive hit coming from one focus point.
Digital Asset Arrays (DAA) offer investors the opportunity to spread risk and invest in multiple areas at once, even if the individual investor doesn’t have a substantial amount of capital to start with. DAAs operate in a way similar to a hedge fund or mutual fund where investors look to spread their risk and maximize safe returns.
DAAs are funds run by a manager who chooses specific digital assets to invest in. What users end up with is a large fund, funded by investors contributing to it, that is invested in a variety of digital assets. For example, you may have a fund that you decide to contribute to that uses money invested by contributors to Bitcoin, Ethereum, Nano, and a number of other projects. The key here is diversifying how your money is invested.
ICONOMI is one of the first projects to really introduce the notion of DAAs for investors and offer different funds to choose from. While not the only option on the market, ICONOMI has been leading the way with the new strategy. Investors have the opportunity to contribute to a fund via a selection of other cryptocurrencies (BTC, ETH, CFI, ICN, & BLX) in order to get invested in it. As the funds are managed and value increases (or potentially decreases), those invested in the fund will see a return on what they initially contributed. For those interested in ICONOMI specifically, you can learn more by visiting the official site here and see the dashboard of available DAAs here.