Digital assets, as a new asset class, exhibit interesting characteristics that could benefit a diversified portfolio of traditional assets. There are, however, many ways to get exposed to digital assets — passive investment, actively managed, short or long term investing, etc. — and with over 800 funds of all sizes, ranging from passive index to active trading funds to venture capital funds and fund of funds, it can be hard to sort the wheat from the chaff.
Just like hedge funds, crypto funds come in all shapes and sizes, and investors tend to look at them through their usual hedge-fund analysis prism. However, as crypto funds deal with a new asset class that has unique characteristics — digital assets — investors can be led to misleading conclusions when traditional asset metrics are used.