Twelve months ago, bitcoin was trading at $5,355. In the last few weeks, it broke $60,000 hitting another all-time high of over $61,500.
That’s a 1,048% return over the last year.
If that’s not spectacular enough, consider that bitcoin has gained over 100% since the start of January 2021.
Since then PayPal has started offering cryptocurrency related services, Goldman Sachs created a crypto dedicated trading desk and Tesla bought $1.5 billion worth of Bitcoin and just a few days ago announced that you can now buy their cars using Bitcoin.
Big name corporates and investment banks have also changed their tone with crypto and have come out with price predictions suggesting the current bull run still has plenty headroom.
As the graph below shows, Bitcoin was by no means the top performing cryptocurrency over the last year. It was outperformed by Cardano (3,674%), Binance Coin (1,892%), Polkadot (1,174%), Ethereum (1,133%), and Chainlink (1,111%).
Bear in mind that these are highly volatile assets and can move well over 30% up and down each month.
Virtually all of these smaller cryptocurrencies, known as alternative coins or “alt coins,” are constituents in the Revix Top 10 Bundle, which has grown in unit value by more than 1,060% over the last 12 months – well ahead of bitcoin’s 12-month return.
Who is Revix?
Revix is backed by JSE-listed financial services group Sabvest and was launched in 2018 to make it secure and easy to invest in both individual and ready-made baskets of cryptocurrencies that they call crypto “Bundles”.
Customers can get started with as little as R500 and the fintech charges no sign-up, monthly account, or subscription fees, but rather a simple 1% transaction fee for both buys and sells.
The advantages of owning a crypto bundle with Revix
One of the advantages of investing using the Top 10 Bundle is that it equally weights each of the top 10 largest cryptocurrencies as measured by market capitalisation.
Revix’s Founder and CEO, Sean Sanders, a Chartered Financial Analyst (CFA) who previously worked as a portfolio manager, explains, “If you were to buy a Top 10 Bundle that was market weighted, you’d have roughly 73% of your total investment in bitcoin and Ethereum alone. That’s not a diversified crypto portfolio and it’s actually increasing your concentration risk in the largest two cryptocurrencies.”
“If you had taken this same approach in the year 2000 with stocks you would have invested in General Motors and Walmart and would have had little to no exposure to the big success stories of Amazon and Microsoft. Additionally, if something negative happens to Bitcoin or Ethereum then your crypto portfolio is going to be seriously impacted.”
Revix’s Top 10 crypto Bundle allocates 10% to each of the 10 largest cryptocurrencies, creating an equally weighted investment that is well diversified.
‘Stablecoins’ (a type of crypto backed 1:1 by fiat currencies like the US dollar and rand) like Tether or USDC are not included as they don’t offer significant return potential as the crypto sector grows. They will always be equal to the US dollar.
2. Superior Risk Adjusted Returns
Historically, Revix’s Top 10 Bundle has significantly outperformed an investment in both a market-weighted equivalent crypto Bundle and Bitcoin alone on a risk adjusted basis.
Including smaller cryptocurrencies in a crypto portfolio with regular monthly rebalancing would have increased your Sharpe ratio, which is a measure of how well your investment would have performed given the amount of risk you’ve taken.
“Bitcoin is viewed as the gateway into the cryptocurrency space but in five years there’s likely to be many other large scale cryptocurrency projects gaining mainstream adoption,” says Sanders.
“Owning a slice of the up and comers is the real investment opportunity. Bitcoin is now worth…