Lesson 6 of 7 · 14 min
Indirect vehicles, asset-backed tokens and DeFi
Investors can gain exposure without a wallet through coin trusts, futures, ETFs, crypto-related stocks and hedge funds, each with its own costs and tracking quality; separately, asset-backed tokens put real assets on a blockchain, and DeFi builds financial services from smart-contract applications.
In short
- Coin trusts: shares in a trust holding a pool of one cryptocurrency, traded OTC like a closed-end fund; no wallet needed, but high fees (sometimes above 2%) and prices can sit at a premium or discount to NAV.
- Futures: agreements to buy or sell a cryptocurrency at a set price and date; usually cash settled, inherently leveraged, and may be less liquid and more volatile than mature futures markets.
- Crypto ETFs: typically do not hold coins directly; they track returns using cash and derivatives (mainly futures).
- Crypto stocks: shares of exchanges, miners, payment firms or hardware makers: very indirect exposure that also carries company and stock-market risk. Hedge funds: discretionary, long/short, quantitative and multi-strategy funds; some even mine.
- Asset-backed tokens: digital claims on real or financial assets, collateralised by them; enable fractional ownership (more liquidity) and are usually classified as securities.
- dApps are smart-contract applications on platforms such as Ethereum; DeFi combines them into financial services, though so far mainly for leveraged crypto speculation.
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