My portfolio diversified with the BCI25 by bitpanda

I am not paid by bitpanda or any other service I write about! This is my own opinion and you can always discuss with me about it in the comments.

However I will get a nice 10€ Bonus as soon as you make your first trade of at least 25€ on bitpanda. But the best thing: You also get 10€ BONUS! register for your account HERE

a link to the GERMAN ARTICLE

Passive investing is not YOLO!

This blog is not for big balls adrenaline junkies who swing trade on a daily basis, moving large amounts of cash and coin on several exchanges! This is not r/Wallstreetbet! This is just an ape trying to diversify his portfolio by investing in the market. I am not trying to beat the market. There is a decent amount of studies, that say that if you take 2 investors, one actively trading on the stock market on a regular basis, the other passively investing into the market by investing in index funds and exchange traded funds, after a  time of 20 years the passive investor will have the better balance! If you want to read more about passively investing, I recommend german author Gerd Kommer. I link his publications HERE

I am a passive investor, always have been. I am just not made for the huge risks of intraday trading. I am a smalltime passive investor. I invest large amount of my savings in passive ETF portfolios. About 2,5% of my savings go into high risk products where I account cryptocurrencies as well. For me they are still a high risk financial product and I act accordingly only investing amounts I can afford to lose. Since my investing strategy in centralized finance is a very diversified a one, I have been looking for similar solutions in the crypto space. And was really happy when I saw the product bitpanda had thrown on the market. 

BCI5 to BCI10 and BCI25, 3 indices to choose from

So what is this product? It is the BCI or the bitpanda crypto index. There are 3 indices you can choose from or you can choose to invest in all 3 of them.

So what is a crypto index? Some things are already written down and are just perfect for a quote. This is how the support page of bitpanda defines the term:

A Crypto Index is a defined portfolio of selected cryptocurrencies that you can buy, sell or swap with just one click, instead of going through the process of buying and selling each coin individually. It helps you to easily diversify your cryptocurrency portfolio. Additionally, through a process called “rebalancing”, your portfolio gets adjusted to the most up-to-date market information on a monthly basis.

So now that we know what this thing is let?s take a closer look.

For those who cant read:

BITPANDA.COM

screenshot bitpanda.com 2021.07.02 9:50 am

First let?s take a closer look at bitpanda as a company! You can get all this information in the legal notice on their site.

Bitpanda GmbH is registered in Vienna and has 2 CEO?s Paul Klanschek and Eric Demuth.

The FMA Finanzmarktaufsichtsbehorde (yeah thats one long german word) is comparable with the SEC in the US is monitoring them, wich makes the bitpanda exchange a centralized exchange of cryptocurrencies. 

There are two other companies with the name bitpanda registered at the same company address: Bitpanda Metals GmbH, and Bitpanda Payments GmBH. These companies represent the other branches of the bitpanda global exchange. As you can buy metals like gold, silver and platinum they where obliged to start a second company with the needed licenses. 

So this is pretty great, knowing that these companies are close by (I actually live in Vienna) and regulated strictly by Austrian authorities.

BCI25

I decided to invest longterm in the BCI25 since for me the most important is diversification. The BCI25 consists of 25 assets chosen by market cap size and liquidity. I decided that I would test this index by investing passively on a monthly basis. My trades so far

• 8th of January BUY BCI25 for 50€
• 11th of January BUY BCI25 for 51€

Yeah I know that is pretty low volume and also still active since I bought the index twice in January. The reason for that was a major correction in the crypto market and therefor a drop in the index price so I thought this is a good opportunity to average down on the initial investment.

The Bull market in January of course had a great impact raising my initial investment of 101€ to a stunning 145€ in just a month. Of course it could have gone the other way around and probably will in the future. The good thing is that the 25 assets get rebalanced on a regular basis mitigating the risk of huge swings. From now on I will invest each month on the 15th. buying 25€ of BCI25 @ market price. This happens automatically without me having to do anything thanks to the bitpanda savings function. My bank issues a fiat transfer every month to bitpanda and they buy the asset for me automatically. By end of this year I plan to raise the monthly investment to approx 30-35€ per month. Hoping to double the monthly investment by the end of 2022. Depending on my financial situation it could be that the amount I invest will grow at a much higher pace, but I will always try to balance my investments by only investing 2,5% of my monthly savings into high risk assets. 

So lets have a closer look! What does the index consist of?

These are screenshots of my actual BCI25 wallet in the bitpanda app, I am reporting daily on istagram and would be very pleased to see some of you hitting that like and following me.

check out the @bitpandummy account on insta!

So thats all 25 assets contained in the BCI25 after the rebalancing on the 31st of January. The rebalancing is done automatically and consisted in following transactions in my wallet.

If you want to know more about the details on how the index is accounted for and how rebalancing works you can check out the legal documents here: BCI_LEGAL

I wont go into detail but you can see that the portfolio is pretty diversified and that rebalancing gives you a nice profit over time. I will keep investing my monthly portion of 25€ since I have long term plans with this index I will propably only realize profits in 5-10 years lets hope the market stays bullish and my investment grows steadily. 

If you want to benefit from being at bitpanda get yourself and me a 10€ Bonus on your first trade! register your account with my referral link!

I will keep you posted here and on my instagram channel!

Thank you for your time and please let me know how I can evolve as a writer! Did you enjoy this read? Thank you for your generous tip :)

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