Why We Created the Investment Committee
The Index Coop Investment Committee is off and running
We have been publishing the Weekly Newsletter from the Index Coop community for a couple of months now and will continue doing so. But with the formation of the Investment Committee, our Substack is becoming home to more content, from investment insights to token analysis and crypto education. Which is why we are rebranding it from Index Coop’s Newsletter to Index Coop Insights. Same great content, just more of it!
For those of us already involved in the crypto space, the potential market opportunity of ETF-style indices and structured products is painstakingly obvious. Drawing parallels to traditional finance, as we often do, ETFs and index funds were an afterthought for a long time. But today, global ETFs are a $7 trillion industry. In the US, ETFs and mutual funds combined account for $26 trillion of the US stock market's total market capitalisation. That's more than 50% of the market. By comparison, assets under management for crypto index products are less than $100 million, relative to the total crypto market cap of close to $1 trillion. This indicates that ETF-like indices in crypto are a nascent space set for explosive growth.
Which is exciting for us at Index Coop, because we create structured products that make investing in crypto accessible. Our vision is to make life simple for those who want to participate in the DeFi revolution. Whether you want broad sector exposure to DeFi or a convenient way to manage a leveraged position, it is our goal to make it as seamless and intuitive as possible.
Crypto is an emerging technology in the mode of perpetual innovation. While bitcoin has been around for a dozen years, Ethereum is roughly half that age, and DeFi is an even more recent phenomenon. Even though some DeFi protocols were launched during the previous market cycle, the space took off in earnest in 2020. Therefore, if we want to bring ever more people into the ecosystem, we have to put in time and effort to educate them. To teach them about the opportunities and warn them of the risks. This is not about selling our products or getting a bigger slice of the crypto indices pie. Instead, it is about growing the pie by the multiples, which is the only way we know how to grow in crypto.
And while product design and product-market fit are important, we also understand that trust is essential for people to put their hard-earned money into our products. You probably want to make sure that we, and our methodologist partners, know what we are doing. That we understand the projects our funds hold, including the teams behind them, their token and business models, and their governance.
This is why we set up the Investment Committee (IC). The main goals of the IC are to analyse the underlying tokens in our funds, their business models and value propositions. To dig into their governance proposals and share the analysis with the community. To create investment insights and educational resources that, combined with our products, make it easy to get on-board the crypto train and become a fully-fledged participant in the DeFi ecosystem. The possibilities are truly endless, and we are excited to get started.