The Iconomi platform offers investors the ability to buy into managed funds which are composed of a basket of cryptocurrencies and blockchain tokens. It is marketed as one of the easiest ways to invest in cryptocurrency as well as a method to reduce risk, time costs and hassle for investors.
Iconomi describes itself as a “digital assets management platform”, and essentially it allows you to gain exposure to a broad range of blockchain technology projects without needing to actively manage your own portfolio. This means that you don’t need to have an in-depth understanding of the technology or the market, and you don’t need to spend all that time researching every new thing which pops up (of which there are many) or keep up with the latest news and developments to rebalance your portfolio.
The cryptocurrency markets are notoriously fast-moving, volatile and difficult to understand for many people – especially if you are not particularly technically minded. Storing large numbers of different tokens and coins can also be a real hassle, a real drain on computing resources, and can open you up to the risk of theft or loss if you mess up. Combine those factors with the trend towards ‘passive’ investing in things like index funds within the traditional investment world of stocks and shares, and it seems to me that there should be a market for this kind of service.
Although Iconomi is fairly new and hasn’t yet released the full range of funds and features that they have planned, they have just opened up their inaugural investment fund to the general public after a period of private testing with early backers. So this seemed like a good time for me to take a look at what they are offering and write up a short review.
Digital Asset Arrays
I described Iconomi’s products as investment ‘funds’ in the opening paragraph. This was because I wanted to provide an easily digestible summary using familiar language. But the company themselves describe them as ‘Digital Asset Arrays’ (DAA).
There are Digital Asset Arrays running at the moment: one ‘passively managed’ index array, and one ‘actively managed’ performance array.
ICNX is the passive array and is roughly analogous to a stock market index fund, with just a few differences.
The value of this fund therefore linked to the overall value of the blockchain economy as a whole. An investor may choose to buy into this fund in order to hedge against the risk of owning a single cryptocurrency by diversifying into a wide range of digital assets.
The coins and tokens included in this fund currently represent over 90% of the total market capitalization of all cryptocurrencies. But not all cryptocurrencies are eligible for inclusion. Eligibility requirements stipulate, for example, that a crypto must be available on major exchanges, have sufficient trading volume, and not have excessive levels of inflation.
The ICNX DAA is rebalanced at least once per month to reflect current market conditions.
There is a 3% management fee and a 0.5% exit fee for investments made into this DAA ‘fund’.
ICNX can now be purchased by the general public using either Bitcoin or Ether.
ICNP is an actively managed array which invests in ‘Initial Coin Offering’ or ‘ICO’ sales.
Currently this DAA is closed to new investors, but you can gain some exposure to it, as well as to the value of the platform as a whole, by purchasing Iconomi’s ‘ICN’ token which is already trading on major exchanges such as Kraken.com.
Ease of Use: Is it really the easiest way to invest in cryptocurrency?
In order to invest in a DAA you need to provide your personal details and go through some form of verification. Exactly how much depends on the amount of money you want to invest.
The first level of verification is quick and simple: You just need to verify your email and your mobile phone number by receiving an SMS message with a special code. This allows you to invest and withdraw up to the equivalent of $1000.
For larger amounts you need to show your ID during a video call.
Once you have the appropriate level of verification all you need is deposit either Bitcoin or Ethereum and go to the main dashboard of your account. From here you can see each fund’s returns over the last week and month, view the breakdown of asset allocations, and click to buy or sell.
Overall the ease of use is good. The site is easy to navigate, everything is explained clearly, and the general feel fits with the ambition to be the easiest way to invest in cryptocurrency.
Currently you can only hold your DAA fund tokens within your account on the Iconomi website. The next level of development will bring in the ability to withdraw tokens to a wallet and perhaps transfer them to other exchanges.
In addition to that, there are plans to allow professional and skilled amateur traders to make an extra income by creating their own DAAs which other users can then invest into