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With the collapse of Bitcoin from more than R250 000 to about R70 000 currently, the hype around crypto-currencies has largely died down. It usually takes a wipeout like this for people to understand exactly what is meant by a risky investment.
However, pundits argue that there is a future for cryptocurrencies and, now that much of the speculative activity has been removed from crypto markets, it could be time to start putting a bit of “fear of missing out” money into this investment space.
One of the challenges with cryptocurrencies is which one to bet on. While Bitcoin is the most well known, there are more than 1 600 available, including the more familiar Ethereum and Ripple.
A new digital assets platform has been created by financial technology entrepreneurs Sean Sanders and Louis Buys. The aim of their platform Revix is to create an ETF-like investment structure for cryptocurrencies. They have put together a bundle of the top 10 most traded cryptocurrencies, which effectively make up 80% of the cryptocurrency market.
Sanders says the benefit of following a bundled approach is that it reduces risk through diversification. What’s also interesting to note is that, between January 1 2016 and December 31 last year, the Revix Top 10 Crypto Bundle would have outperformed an investment in Bitcoin alone by 109% on an annualised basis.
Diversification also provides some protection against the failure of a single cryptocurrency. As an investor, you still own the actual cryptocurrency, but Revix offers a full custody solution to keep the assets safe.
Buys says that they are able to source the best prices because they are able to purchase cryptocurrencies across global platforms. Revix uses proprietary technology to plug into global exchanges, and a smart pricing algorithm seeks out the best available pricing for investors on reputable exchanges.
“Typically, by connecting with global, liquid markets and using technology, we can get better prices than what has otherwise been available to local investors,” says Buys.
Revix has been funded by JSE-listed investment group Sabvest, which will provide some peace of mind to investors who are wary of investing on virtual platforms.
Although cryptocurrencies are currently unregulated, Sanders says they have engaged with regulators and will ensure that the product complies with future regulatory changes.
However, this remains a high-risk investment as cryptocurrencies are extremely volatile and are currently driven by sentiment rather than fundamental factors. Any money invested should be considered to be “burn money” – this is certainly not the place for your child’s education fund.
THE DETAILS
The minimum investment is R500 and can be made on Revix’s web-based platform revix.com. The app for Android and iOS is still in development. The platform uses images of your ID or passport and selfies to verify your identity.
THE FEES
Monthly rebalancing fee: 0.17% a month or 2.04% a year.
Transaction fees: Buying or selling incurs a 1% Revix trading fee.
Withdrawal fees: An amount of R30 is charged on withdrawals. For amounts of more than R200 000, there is a 0.05% withdrawal fee.
There are no performance fees and no storage fees
Revix’s offering
- The top 10 bundle is a diversified and equally weighted bundle of the 10 most prominent cryptocurrencies.
- The payment bundle is an equally weighted bundle of the five largest payment-focused cryptocurrencies. These blockchain technologies are making payments faster, cheaper and borderless.
- The platform bundle is an equally weighted bundle of the five largest platform cryptocurrencies that have been developed to improve many of the current inefficient systems, processes and governance structures.
- The privacy bundle is an equally weighted bundle of the top three privacy-focused cryptocurrencies. These blockchain technologies aim to protect your right to privacy online.
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