The curious case of India’s first crypto mutual fund

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Also read | Cryptocurrencies are rallying again, but concerns remain The lack of regulation, however, places investors heavily at risk in this type of instrument. This risk is on top of the massive price volatility of crypto and the risk of hacking associated with it. An investor needs to register on the BitSave app, complete the customer verification requirements, and then deposit an amount in rupees via UPI, which will immediately be converted to USDT, which is also known as Tether, a cryptocurrency stablecoin, where the value of a digital asset is pegged to something like a fiat currency, in this case the US dollar.

Investors also have the option to directly transfer USDT tokens to their BitSave wallet. These USDT tokens are then transferred to a Seychelles entity owned by BitSave. The USDT is then converted to other tokens on cryptocurrency exchange Binance in the same weight as it’s mentioned in the index.

Bloomberg rebalances its index monthly and all coins will have a weight in the range of 1-35%. Also read | Stage set for return of Binance, Kucoin to India Investors on BitSave are issued a custom token on Polygon. This token gets priced on a daily basis as per the net asset value of the Crypto Mutual Fund holdings present in Seychelles, and is shown to the investor on the BitSave app.

The net asset value is calculated every day based on the net present value of the underlying assets divided by the total outstanding units. If the total value of the underlying assets is $200,000 and the total outstanding units are 100,000, then the NAV for the day would be $2.00. BitSave charges 1.5% as expense ratio, which gets deducted daily from the NAV.