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Analysis

A Tale of Three DeFi Indices

by Erina Azmi -

Disclosure: The content is strictly for your general information only. No part of the content that we provide constitutes financial advice, legal advice, or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion. 

If you are like me, you probably do not have time to monitor your portfolio constantly due to time constraints. You want to keep yourself from gluing your eyes to your screen 24/7 to keep your mind sane.

Yet, you do not want to miss out on the potential high returns cryptocurrencies have to offer. Passive investing can be your savior, and one of the popular passive investing strategies is via ETF. Play the long-term game and win the market. 

An ETF is a type of structured security that can track anything such as an index (e.g., S&P500), commodities (e.g., precious metals), or other assets. An ETF can be purchased or sold on a stock exchange. 

Historically, index funds and ETF have a better return than actively managed strategies like mutual funds.1 In 2020, the global ETF had $7.74 trillion in Assets Under Management (AUM), and its volume is one-third of global equity trading volume.2,3,4 

While DeFi ETFs have amounted to approximately $204 million AUM, it is not far-fetched to imagine this figure could reach trillions of dollars in the coming years. There is a high potential for large capital inflow into DeFi, and we are very early in DeFi index investing.

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