Coin Sets by Mudrex: How is mutual fund-like cryptocurrency investment scheme faring?

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Investing in cryptocurrencies could be baffling for first-time users. Not just about risks and uncertainties but the choice of coins too. New users may find it very difficult to decide which coins to pick first. Of course, there is Bitcoin, the king of all cryptos. But driven by the lure of quick and insane returns, new users often end up losing money by investing in untrustworthy, or what has become popular in the crypto world as ‘shit coins’.

In order to provide a solution to users, who are not sure about which coins to pick, Bengaluru-based home-grown global cryptocurrency asset manager Mudrex recently introduced a mutual fund-like crypto scheme called Coin Sets. It allows users, including those from India, to invest in several theme-based crypto coins at one go by parking a certain amount of fixed amount.

FE Online caught up with Mudrex CEO and Co-Founder Edul Patel to know how Coin Sets have performed since launch, how it works, risks and safety concerns over regulations and new plans. Excerpts:

How are Coin Sets similar to mutual funds?

Coin Sets is a basket of tokens based on a certain theme managed and rebalanced by the Mudrex team. The idea was to create a simple product like a mutual fund that helps users invest in one click, without them worrying about what is the exact token to buy and how much to buy etc.

You can think of Coin Sets as an index fund. Just like Nifty50, where you have a basket of stocks, in Coin Sets you have baskets of tokens/coins where users invest. There is no active buying and selling in Coin Sets.

But in mutual funds, we know the fund manager’s name. What about Coin Sets?

The fund manager is the Mudrex team. We mention this on the site. But as time progresses, we are going to add more and more information about the team and about the fund manager.

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What has been the user response to Coin Sets till now?

The response to Coin Sets has been phenomenal. Over the last month or so itself we have got around 3000 users invested in these Coin Sets. The total amount invested through Coin Sets would be close to 5 million-6 million dollars now.

Returns from Coin Sets

With the crypto market generally being positive, those Coin Sets have performed really well, which is a great thing for users.

Aren’t APY claims on your website misleading?

Coin Sets give market-linked returns. What we are showing is the returns in the last 1 year. And the honest reality is that in the last 1 year, returns have been actually that high. But we are not claiming that these are going to be future returns. What we are showing is these are past returns. Every user who is live on the platform gets to see live returns.

In fact, some Coin Sets, in which I have invested, have given 80-90 per cent returns in the last one month and a half, which is great but, of course, it may not repeat.

How do you decide themes for Coin Sets? Who decides?

The theme actually comes by talking to our users on the discord community and other popular channels, where users come and tell us that they are looking to invest in a theme of, say DeFi or NFT etc…That’s how we poll and get suggestions.

Now once the theme is decided, our in-house quant team looks at all different tokens available that fall inside that theme and then select them on the basis of different parameters. The parameters we look at are:

• how trustworthy is the team behind the particular coin
• how trustworthy or scalable is the community behind the coin
• what is the market cap
• Where it is available and whether it is easily available for trade on different exchanges or not.

So we only look at trusted verified projects. And not just any random coin. The goal is to make sure that users are able to create wealth in the long run and not just go out and invest money in some random meme coin or shitcoin that will go to the moon!.

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Is users’ money safe in Coin Sets?

Just like mutual funds, Coin Sets are also subject to market risks. You may get significantly high returns if the market goes up. Your returns will be lower when the markets go down. This is the basic risk.

How safe is Mudrex wallet

The actual core wallet is hosted in partnership with Binance and BitGo. Only entry and exits are allowed from Mudrex infrastructure and from Mudrex IPs. Not anyone in the company has access to the funds.

Because we use the same infrastructure as Binance, our wallets are as secure as it gets today.

What if there is negative regulation from the Government?

In the case of negative regulation, it depends on what is the nature of the regulation. But whatever it is, I am sure we can help our users manage and figure out a way to exit crypto, if required.

So even if there is a negative regulation, funds will be safe?

Yes. Correct. We can at least help people figure out how do they exit crypto in case of negative regulation but funds are always secure.

New Coin Sets and plans

There are three new Coin Sets themes launching – Metaverser, Decentralised Autonomous Organisations (DAOs) and Gaming. These new themes are going to be launched by the end of this week itself.

We are also working on direct bank account integration, which will go live by December first week. It will allow users to directly deposit INR into Mudrex wallet.

Should new crypto users include Coin Sets in their portfolio?

Absolutely. If someone is interested in crypto, I would recommend starting with this. Because what happens today is if someone is interested in crypto then they go and buy Bitcoin. Now buying Bitcoin is like buying Reliance Stock, which we all know will do great in the long run if the markets continue to do well. But effectively that’s not the best way to invest. Because it’s very risky holding just one stock. Coin Sets help diversify that risk and it also gives exposure to a wider set of coins in one go.

If someone is interested in crypto, then instead of buying bitcoin, I typically tell them to invest in Blue Chip Coin Set. It includes not just Bitcoin but all top 5 cryptos, which will help in getting better and diversified returns.

But investing limit is very high (300 USDT) in the Blue Chip coin set?

We are working to allow users to start investing in Coin Sets with as little as 10 dollar by the end of this month. Later, it will be reduced to 1 dollar. We are also working on creating a SIP kind of feature.

What about fees?

There are no fees on transferring USDT from Binance to Mudrex wallet. Binance will show you the fee but it actually never gets charged.

(Cryptocurrencies are unregularised assets in India. Investing in them could be risky. Please consult your financial advisor before investing in cryptocurrencies.)