In the first of our three-part series, we’ll delve into crypto structured products! Let’s start by debunking some common myths.
Crypto structured products are innovative financial instruments that allow investors to gain exposure to cryptocurrencies like Bitcoin and Ethereum, in a structured and alternative way than direct ownership. But despite their growing popularity, the nascent and sometimes complex nature of structured products, combined with often unnecessary jargon, have fostered several misconceptions.
In this article, we’ll debunk three of the most common misconceptions about crypto structured products, so you can improve your understanding of this asset class.
Debunking the myths
Myth #1: “Crypto structured products are too risky.”
Contrary to popular belief, crypto structured products can sometimes mitigate some of the risks associated with investing in crypto.
Meticulously designed using combinations of derivatives and tailored financial structures to offer predefined returns, crypto structured products can offer protection against downside risk while still allowing investors to participate in potential upside gains.
A risk-adjusted exposure created through a structured product could present a more appealing entry point to the crypto market for cautious investors.
Myth #2: “Only tech-savvy investors can use crypto structured products.”
While it's true that a basic understanding of blockchain technology and cryptocurrency is advantageous, you don't need to be an investment expert to use basic structured products. Many digital wealth platforms are intuitively designed, and provide ample resources to support learning and decision-making.
What’s more is that structured products are often curated by experienced financial professionals. That’s the case here at Yield App Pro, where our team - who have decades of experience in these instruments - manages the technical aspects and is always keen to help our users in expanding their knowledge and diversify their portfolios if they so choose.
Myth #3: “Crypto structured products are only effective in the bull market.”
The effectiveness of crypto structured products isn't tethered solely to a bull market. Instead, these offerings can be market-sentiment agnostic and come with customization options to align with an individual's investment goals and risk appetite. Whether the market sentiment is bullish or bearish, there are often crypto structured products that hold the potential for gains, minimize losses or achieve one's own objectives.
Crypto structured products are not always inherently risky when applied to achieve a specific objective, nor do they necessarily require advanced technical knowledge, and are not strictly reliant on positive market conditions.
Stay tuned for our next article, which will tackle the current landscape for crypto structured products.
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DISCLAIMER: The content of this article does not constitute financial advice and is for informational purposes only. The price of digital assets can go down as well as up, and you may lose all of your capital. Investors should consult a professional advisor before making any investment decisions.