Whether you were one of the 10% of Easy investors who said adding crypto to our investment options would be a total game changer, or you're still just a little crypto curious; you'll want to know a bit more about the DCX10 crypto token. The brainchild of former FNB CEO and venture capitalist Michael Jordaan (who was recently referred to as SA's Steve Jobs by Financial Mail) and entrepreneur Earle Loxton is now available to invest in as part of your EasyEquities portfolio.
What is the DCX10 token?
The DCX10 token is a crypto token linked to the value of the DCX10 Index. The DCX10 Index holds the top 10 crypto currencies as assets. It works exactly like an ETF or a unit trust which holds a selection of underlying assets in a fund structure. The difference is that this index is a token, and does not trade on an exchange.
You’ll be able to invest in this token, the same way you would invest in shares on our platform. With any amount you’ve got, and 15 minute delayed prices.
Do I own the underlying cryptocurrencies if I invest in DCX10 tokens?
Just like a unit in a unit trust or an ETF, investing in the DXC10 token doesn't mean you own the underlying assets/cryptocurrencies in the DCX10 Index (ie fund) through your token. The token is a digital representation of the value of your investment in the collection of cryptocurrencies that are in the DCX10 Index. This is just like a unit trust and ETF.
What’s inside the DCX10 Index?
The constituents and weightings can be found here, and are rebalanced monthly.
How much does it cost to invest in a DCX10 token?
The price of the DCX10 token is based on the value of the underlying cryptocurrencies in the DCX10 Index, the same way the price of a unit in a unit trust is based on the underlying assets held in the unit trust.
Here's an example of how that works:
For example, if you wanted to invest R100 in the Satrix Money Market Fund (which is a unit trust) and the units in the fund were priced at R10 per unit, you would receive 10 units. The DCX10 Index works the same; if you had R100 to invest in the DCX10 Index and the DCX10 token was priced at R10 per token, you would receive 10 DCX10 tokens. It also works in fractions the same way as ETFs do on EasyEquities; so if you had R1200 to invest in the DCX10 Index, and the DCX10 token was priced at R500, you would receive 2.4 DCX10 tokens.
The fees that you would pay on the value of your transaction are:
- Our normal 0.25% brokerage
- Settlement & admin
- NO securities transfer & tax
This works out to about 38c on R100 investment.
Priced within the token is an annual 1% fee which goes to DCX, which is kind of like TER on an ETF. You won’t see this in the cost breakdown.
Do I own those currencies if I invest in the DCX10 token?
Nope. The same way you wouldn’t own individual shares within an ETF and be able to trade them individually. You also cannot take your token out of your EasyEquities account to trade on a secondary crypto exchange or move to another account.
You invest and make a profit/ loss, and you’d then have to sell to realize that profit/ loss.
What are some of the benefits of investing in the DCX10 token?
Crypto is risky, but investing this way means it's diversified. Why? Because instead of holding one crypto asset such as a cryptocurrency like Bitcoin (ie all your eggs in one basket) – you can buy the DCX10 token which gives you exposure to the top 10 cryptocurrencies as opposed to just one, like Bitcoin. Again, a bit like an ETF. So, if the world of Bitcoin experiences a lot of volatility and other cryptocurrencies don’t, your risk is diversified across the 9 other cryptocurrencies in the token.
Investing on a crypto exchange can be risky because these exchanges have experienced hacks and fraud. DCX10 tokens on EasyEquities will be held in cold storage by DCX which is a safe and secure digital environment to store these digital tokens and is managed by DCX itself.
Read more on the DCX10 crypto index in our FAQs.