What is a Bitclout “Index Fund”, and should I invest?


In the world of Bitclout things happen fast.   It was little more than a few weeks ago, that the platform came into existence— and already there have been layers upon layers of innovation building new and exciting ways to utilize the platform.

As with any emerging industry or market, those who adopt and perfect early can see huge upsides— as the masses catch on.   Bitclout in this sense, is no different.

There have been some obvious early accounts, and creators who have managed to edge themselves above the ever-growing and extremely competitive market.  Names like @craig , @jakeudell and @WhaleSharkdotPro

In addition to these top accounts holding most of the money in the platform (either through their own CCs or their holdings), they also hold a significant amount of star power.   Just yesterday for instance, the biggest news on the platform was the induction of the latest member to the self titled “Bitclout Boys” (An exclusive group of whale accounts, that are friends IRL).

Such success (collectively in the tens of millions of dollars) brings on interest to say the least— and Jealousy.   A healthy amount of jealousy never hurt anyone, and in fact— if channeled correctly, is probably what got us all on the clout in the first place!   But what happens when that jealousy turns sour?

These questions will be answered in the coming weeks, as people continue to experience, innovate, and create— but one experiment that has gotten our attention (and not necessarily for the right reasons) are the ever popular promises of “CC Index funds” — and CCs that are intentionally misleading.

An index fund, put simply, is a portfolio of investments that typically holds an array of holdings— giving investors an easy and relatively stable way to invest.  The theory is— with a large enough group, the individual ebbs and flows will balance each other out— summing in stable and predictable growth.   Index funds have a proven track record in classical markets, and put simply— they’ve been working!

So what does that mean for Bitclout?   In our opinion, it’s too early to tell— but there are some definite warning signs that have us fearing the viability of the platform — for the first time.

Our biggest concern is for investors, particularly unaccredited or experienced investors getting duped.   This is extremely easy to have happen, especially in the early days— as there is literally zero regulation or oversight happening on the platform currently.

This is allowing for some accounts to create very misleading profiles, which are compelling hopeful investors to invest in something that may or not actually be as advertised.  

Traditional financial institutions require securities and trading licenses, and are required to provide extremely detailed accounts of all their transactions.   There are third party, often international governing bodies conducting audits, and creating best practices… and in Bitclout, currently— none of this infrastructure exists!

So what does that mean for prospective buyers?  Are Bitclout indexes possible?  Are they legal?    Should you invest in one?

Possible— Yes.  Legal?   This is for the courts to decide.

Should you invest in one?   This depends on how, and where you are investing.   If you come across an account on Bitclout that labels itself as an “Index of the top CCs”— ask yourself— how is that possible, and what exactly are you buying?

How is the value of the CC you are purchasing linked to the rise of the “Index Fund”?   

For this to happen legitimately— the fund would have to be held by a TRUSTED party, that invests all investments equally into its “Fund” (ie. grouping of CCs), and therefore the CC of the “Index Fund” account itself has ZERO correlation to the Index itself.

Perhaps there is something we are missing, but in our opinion— Index funds will have to be created ON TOP of Bitclout, by licensed and trusted parties who are held accountable by governing bodies.

Although there is lots of uncertainty surrounding Bitclout Index Funds — we believe the concept is solid, and there is definitely a future— the community just needs to figure out a safe, and legal way to make it happen!

To the moon!


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