Getting ETF-like market returns in crypto
Passive investing in crypto
Looking for Market-Size Returns? Start With the Ground Floor
The first question most newcomers ask is, “Which token should I buy?”
Fair enough. Crypto is a carnival of tickers—thousands of symbols flashing by like race-cars. But “which token” is usually the wrong place to start.
The better question: “What kind of return am I actually after?”
Two worldviews, two games
If you think the current $2.5 trillion crypto market is already mature, you’ll hunt for outliers—projects you believe can outrun the pack. That’s old-school stock-picking, just with new labels.
If you believe the whole pie could still grow 10x, then simply capturing average market growth may be enough to change your life. For people with day jobs, 10× feels just fine.
Traditional markets offer both paths. Active managers scour annual reports for edge; passive investors buy index funds and call it a day. Crypto, so far, hasn’t handed us its S&P 500 on a silver platter. Most funds launch a single-asset product—Bitcoin here, Ether there—but that doesn’t give you the market’s full pulse.
The case for the plumbing layer
When in doubt, own the infrastructure. In crypto that means Layer 1 blockchains—the base networks on which everything else gets built.
If a thousand start-ups launch on Ethereum and 950 flame out, Ethereum can still win as long as the surviving 50 produce enough traffic and fees. Platforms don’t need every tenant to succeed; they just need activity. That’s why a simple basket of major Layer 1 tokens can behave like a broad-market index—even if nobody has printed the ETF yet.
So, back to the question
Want lottery-ticket upside? Dive into Discords, chew through white-papers, chase the next small-cap token. There’s nothing wrong with that—just know the game you’re playing.
Want market-level returns in a space that might still have miles to run? A measured allocation to the leading Layer 1s gets you there without picking favorites among the restaurants on the street.
Either way, decide what finish line matters before you start running.
All opinions are my own. This is not investment advice. Re-written May 17, 2025