What Are The Advantages Of Investing In Tokenized Portfolios?

Piyasi Mitra
Piyasi Mitra is a journalist, features writer and copy editor who has worked with The Times of India and the ABP Group, and is currently exploring content creation in the digital space.
  • If you want to gain experience in the world of cryptocurrencies without owning them directly, Tokenized Portfolios may be the best option for you.
  • To begin with, the trader creates a portfolio, sets a specific token value and then finalises the entry, exit and upside fees.

If you want to gain experience in the world of cryptocurrencies without owning them directly, Tokenized Portfolios may be the best option for you. This has become popular as it enables investors to own shares in a fund in the form of tokens and makes for a hassle-free experience. In a recent interview, Tokenbox.io co-founder and managing partner Vladimir Smerkis sheds some light on the same.

Boosted by blockchain technology, tokenized portfolios makes it possible to review the entire mechanism of how assets are moving from user to platform, as well as the other way around. These tokens can be stored in the form of digital ETF, and then used as per convenience. To sum up, such tokens represent a value of all funds in a portfolio divided by the number of investors.

Signs of a good Tokenised Portfolio

Transparency and trust are the key factors, notes Vladimir, for which he advises that every investor should carefully evaluate every trader’s moves, losses and gains throughout its existence. To begin with, the trader creates a portfolio, sets a specific token value and then finalises the entry, exit and upside fees. Another advantage is that traders can also get investors/clients onboard within a platform, and create and track both public and private portfolios. 

Cryptocurrency for Diversification

While there’s no denying that cryptocurrencies come with power-packed potentials, it’s not totally risk-free for rookies, cautions the Tokenbox.io co-founder.  That’s the reason a lot of newcomers see volatility of +20%-40% and go all in, losing all of their funds in the initial stage exploring margin calls, points Vladimir. He also adds that every rational investor should invest in digital assets for at least 5%-10% of their funds, for which he strongly recommends assessing the portfolios and traders on the platform, and studying the performance figures each one has on its portfolio page.

Actions matter, words don’t

Vladimir Smerkis shares that as a general rule, the more investors that trust a certain trader, the more likely that trader is bringing real benefits to users involved.  In case second thoughts arise, one can easily move from one portfolio to another by selling tokens in a jiffy.  As a professional in the crypto field, he reveals that he does both — trade for himself and invest in the platform’s traders portfolios.

New to cryptocurrencies?

Beginners can gain a better understanding of this crypto domain without the need to invest hefty sums in ETFs, funds or unknown traders, assures Vladimir. The PROs can diversify their investments by “hiring trading heads,” which is more economical than having one trading desk at the office. Traders can run their portfolio as before, but on a user-friendly platform and get clients and earn for clients and themselves, which means both parties win.

Tokenised digital assets here to stay

With the pandemic exposing vulnerabilities of the conventional financial ecosystem and people seeking alternate sources of income, interest in cryptocurrency is on the rise. The World Economic Forum also predicts that in 2027, 10% of the world’s GDP, or about $9 trillion will be in tokenized assets. With a view to cater to changing consumer needs,  Token Metrics recently launched 14 cryptocurrency indices that leverage AI to curate successful crypto investment portfolios. The goal is to help crypto users zero down upon the best of profitable opportunities by eliminating out scams.  

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