Passive Investing is an investment strategy that seeks to replicate the performance of a market index or a specific asset class rather than attempting to outperform it through active selection. In crypto, this often involves holding broad market indices or diversified digital asset portfolios.
Mechanism
Its architectural implementation in crypto typically involves investing in crypto index funds, exchange-traded products (ETPs), or automated portfolio management protocols that rebalance according to predefined rules. Such mechanisms often leverage smart contracts for automatic asset allocation and decentralized exchanges for low-cost rebalancing, minimizing transactional overhead and human intervention.
Methodology
The strategic rationale behind passive investing in crypto includes reducing management fees, mitigating individual asset selection risk, and capitalizing on the long-term growth potential of the broader digital asset market. For institutional investors, this approach provides diversified exposure to the crypto asset class through transparent, rules-based strategies, complementing more active RFQ or options trading.
The rise of European closing auctions demands a strategic shift from continuous trading to precision-engineered participation in the day's primary liquidity event.
Closing call auctions are a regulatory mandate to ensure benchmark integrity by concentrating liquidity to form a fair, manipulation-resistant closing price.
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