Investing in cryptocurrencies is not for the faint-hearted. This is especially true when you look at how well the top 20 or so cryptocurrencies performed in 2017 compared to how they are performing so far in 2018.
Having said that, a newly launched diversified cryptocurrencies investment platform in South Africa, BitFund, believes it has a unique offering for those looking for a different way to invest in a variety of cryptocurrencies without having to worry about such technicalities like keeping separate wallets.
What exactly is a diversified cryptocurrencies investment platform?
Is it a cryptocurrencies exchange?
Is it legal to invest in cryptocurrencies in South Africa?
Joshua Miltz, CEO and Co-founder at BitFund.
To answer these questions and to learn a little bit more about BitFund, which was launched on 10 July 2018, I caught up quickly with Joshua Miltz, CEO, and Co-founder of BitFund. Miltz has a BSc Degree in Applied Computing from South Africa's University of the Witwatersrand, he started BitFund along with Jonathon Ferrer, Bradley Goldman, and Dean Joffe.
iAfrikan: What is the difference between BitFund and cryptocurrencies exchanges?
Joshua Miltz: A cryptocurrency exchange simply facilitates the trading of cryptocurrencies between the exchange’s users. BitFund makes use of exchanges to offer its product, which is a diversified portfolio of cryptocurrencies (not too different to a traditional market index). Based on market movements, our technology rebalances clients’ portfolios to keep them in line with the portfolios chosen weightings. This ensures that clients maintain a balanced exposure to each cryptocurrency and don’t suffer from overexposure when certain cryptos drastically under/overperform.
When people invest their money with BitFund, do they buy cryptocurrencies or do they only get exposure to the price movement of the various cryptocurrencies?
All BitFund client portfolios consist of the actual underlying cryptocurrencies and we are not a CFD product. As a result, clients don’t face the usual counterparty risk associated with CFD based investments.
How safe would you say it is to invest in cryptocurrencies?
The cryptocurrency and blockchain market is certainly still in its infancy and faces all of the associated volatility. As a result, clients looking for a risk-free investment would not be well suited at all to this industry. There are further technical risks as well when investing in assets of this type. Amongst other things, exchanges get hacked, private keys get stolen and assets are irretrievably transferred to incorrect addresses. BitFund clients are largely protected against these risks since we take care of all of the above for our clients. Cryptocurrencies are safely stored in offline hardware wallets, which are in turn stored in physical vaults at private institutions.
What does one need to do to start investing in cryptocurrencies through BitFund?
The process is quite simple. First, a client will need to open up a BitFund account by registering and submitting their documents at www.bitfund.co.za (proof of ID and residence). From there, it is a matter of choosing from our portfolios or creating their own, and making a deposit. We currently accept both Rands and Bitcoin deposits.
After making a deposit, our clients have access to some great reporting, weekly rebalancing, safe storage, and peace of mind knowing that their cryptocurrency portfolio is in good hands.
There have been several cryptocurrency scams in South Aftica, is BitFund legal and compliant?
Yes. From the beginning, BitFund has had a very strong focus on compliance. We work closely with attorneys at global law firms including ENSAfrica, as well as compliance company DocFox to ensure that everything we do is well above board. Additionally, it is often the case that shady cryptocurrency businesses go through every effort to conceal who they are and who controls the business. BitFund is transparent in this regard, and is owned by a group of professionals, many of whom have an established track record in both South African and global business.
Cover image credit: Joshua Miltz. BitFund