Through the cooperation of iMaps ETI and comdirect, private investors can create DCA plans for actively managed crypto exchange-traded products (ETPs).
What if I invest today and tomorrow prices plummet? That’s a fear many investors have. And even more so with cryptocurrencies: Price Volatility is the number one concern for investors interested in digital assets like Bitcoin.
One approach has become immensely popular among investors in the past decades to smoothen volatility: so-called dollar-cost-averaging, or DCA. DCA investing means investing a fixed sum of money into a volatile asset class like stocks or cryptos regularly at a fixed point.
For example, you invest 100 euros every 1st day of the month in Bitcoin. As you invest the same sum every month, you buy more Bitcoin at lower prices and less Bitcoin at higher prices. Over time, the price you pay equals the long-term average, meaning volatility is less of a concern.
Of course, it would be better to always buy at low prices and sell at high prices. But that rarely works, as you’d have to have unique market insights that are not already priced in the market. Ask yourself: Are you better informed than all the other investors out there? You most likely are not, so DCA might prove a worthwhile approach.
iMaps cooperation with comdirect
Liechtenstein-based asset manager iMaps ETI AG has now launched DCA plans on some of their actively managed crypto ETPs. It does so in cooperation with the German online bank comdirect, one of the leading retail banks in Germany. Investors can buy these ETPs with monthly payments starting at 25 Euros.
ETP stands for Exchange Traded Product. These products track the price of a cryptocurrency – or a basket of cryptocurrencies. They can be passive trackers or actively managed, meaning an asset manager buys and sells the underlying assets. That’s similar to a mutual fund, but ETPs are exchange-listed, meaning they can be bought and sold continuously.
“The expansion of the product range to include actively managed ETPs from iMaps goes hand in hand with a high level of interest from our customers,” said Rene Delrieux, Product Manager Investing at comdirect.
Why buy crypto ETPs?
You might ask why you should buy an ETP that tracks Bitcoin, paying management fees, if you can just buy Bitcoin directly through an exchange without paying these fees. And that’s a solid question.
The point is that many investors don’t understand how the digital exchange infrastructure works. They don’t want to set up wallets and worry about custody and IT security. With an ETP, they can book them into their brokerage account through an established provider such as comdirect, where they already know and understand the user interface and the regulatory details.
“With our initiative, we would like to contribute to diversifying wealth creation in Germany even more broadly,” said Andreas Wölfl, founder and chairman of the board of iMaps ETI AG, explaining the cooperation. “We are pleased that we have been able to create another opportunity for investors to profit from the developments on the crypto markets through the cooperation with comdirect.”
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