Smart Crypto Trading Bot or Crypto Index Fund? Decide After You Read This

Crypto index funds allow you to purchase a share in a portfolio composed of different cryptocurrencies.

Maybe you have (or haven’t) heard of index funds and trading bots in traditional finance, but did you know that the world of crypto has its very own versions of these two proven wealth-building tools?

If you’re new to the world of passive income (welcome aboard!), read on to learn about the wealth of options available to you.


Crypto Index Funds: Advantages and Disadvantages

Crypto index funds are essentially the same thing as ordinary index funds found in the traditional stock, bonds or commodity market — but with crypto as underlying assets. Crypto index funds allow you to purchase a share in a portfolio composed of different cryptocurrencies. Many are available today, sometimes compiled by popular crypto exchanges such as Huobi and Coinbase, as well as independent fund management companies.

Pros:

  • Diversified risk exposure by investing in a portfolio composed of a variety of cryptocurrencies
  • Less volatility than direct investment into single cryptocurrency
  • Hands-off — no need to track coin prices
  • Minimal understanding of crypto required

Cons:

  • Incurs yearly management fees which often range from 0.05% to 3% (independent of performance)
  • Some are heavy on only a handful of cryptocurrencies
  • For US customers, often only available to eligible accredited investors with net worths greater than $1 million
  • Several are only available to US investors while many are not available to US investors
  • Often requires minimum investment of $100k or more

Crypto Trading Bots: Advantages and Disadvantages

Though trading bots are not new to the world of traditional finance or crypto (check out our comprehensive assessment of the most popular ones here!), the Crypto Autopilot by OSOM is unique for a number of reasons. It features a world-class AI-powered algorithm that finds growth opportunities within 30+ altcoins to increase your Bitcoin holdings. Built with the new-to-crypto folks in mind, it’s incredibly easy to use as well.

But let’s take a look at the facts:

Pros:

  • Diversified risk exposure by investing in a wide range of tokens
  • Developed with experts from the world of traditional finance
  • Less volatility than direct investment into single cryptocurrency
  • Beginner-friendly and hands-off
  • Very low minimum investment required (Approx. 45 EUR)
  • No cap on investment amount
  • High liquidity: Cash-out at any time without any fees!

Cons:

  • Not available to US investors (due to regulations)
  • Users do not have a direct influence on decisions
  • Currently closed beta. Invite-only.
  • Fairly new (public since April 2020, but trading since September 2019)

Comparison: Most popular Crypto Index Funds

Now let’s see the most popular crypto index funds closely compared to the Crypto Autopilot.

What’s better? Crypto Index Fund or Crypto Trading Bot?

You can consider crypto index funds if:

  • You live in the US
  • Are only really interested in the biggest cryptocurrencies on the market
  • You are interested in using an index that is linked to a large exchange
  • You want to have exposure to a limited number of cryptocurrencies
  • You’d like to invest in an index that has been around for several years

Choose the Crypto Autopilot if:

  • You want maximum return potential for lower risk
  • You value ease-of-use
  • You prefer a simple fee structure and simply performance-based fees
  • You want exposure to a large chunk of the crypto market in the most cost-effective way
  • Want to take advantage of highly undervalued altcoins

Although the OSOM Crypto Autopilot is available by invite-only, you can sign up to try it here! Check out our FAQ for more info or simply reach out to us at [email protected].