- DeFi (decentralised finance) refers to an ecosystem of financial applications which helps users exclude intermediaries while making transactions.
- Crossgate Capital, a specialist investor in Bitcoin and other cryptocurrencies, increased its weighing to Ethereum and Chainlink to gain greater exposure to DeFi.
- The majority of DeFi projects are built on the Ethereum platform. DeFi applications also require accurate price data. Chainlink’s oracle network powers a majority of the price feeds that govern, for example, lending and borrowing on the DeFi platforms.
- The approach suits Crossgate Capital as both Ethereum and Chainlink are not dependent on the success of DeFi. Crossgate Capital can therefore gain exposure to DeFi without materially increasing risk.
- Crossgate Capital invests in individual crypto assets with a market capitalisation of a minimum NZD $500 million.
- The Company's objective is to build a diverse portfolio while mitigating risks.
DeFi is the blanket term for financial services like borrowing, lending, and trading built using decentralised infrastructure, such as public blockchains and smart contracts. By using decentralised technology like smart contracts, which are self-executing contracts made of computer code, DeFi allows for the elimination of costs and provides for time saving benefits, as the process is automated and therefore does not rely on middlemen.
As the DeFi ecosystem is still in its infancy, there is the risk of potential failure. Crossgate Capital consider that the DeFi industry is aware of the risks and is working to overcome such challenges in order to make this decentralised industry scalable for mass adoption.
In order to mitigate risk, Crossgate Capital has taken the approach to gain exposure through investing in Ethereum and Chainlink.
Why investing in Bitcoin and other cryptocurrencies makes sense in 2021?
Bitcoin and other cryptocurrencies can take a cue from the fact that they are witnessing sharp rise in investment by institutional investors.
PayPal also added the ability for clients to buy Bitcoin and some other cryptocurrencies, which has opened up the market to millions of new buyers. PayPal has reportedly nearly 350 million users and well over 20 million active merchants who can now accept the currency. One only has to compare the size of PayPal’s userbase to the number of current Bitcoin users to understand the significance of this development.
Investing in the cryptocurrency space makes sense for investors who want to diversify their investment portfolio. Crossgate Capital provides a simple and secure approach to invest in Bitcoin and other cryptocurrencies.
While making investments, the Company also focuses on the return of capital. It makes investments only in the leading cryptocurrencies not in long-tail assets, the smaller cryptocurrencies.
The market capitalisation has to be at least NZD $500 million as at the date of purchase to be considered for investment. Crossgate Capital's objective is to construct a diversified portfolio while managing risks.
Crossgate Capital Limited is the issuer of the products. The PDS for the offer is available and can be obtained at www.crossgatecapital.co.nz