What is Ethereum Classic (ETC)? ETC vs ETH

What Is Ethereum Classic (ETC)? ETC vs ETH

Ethereum is an open-source software platform that enables smart contract functionality and allows programmers to build decentralized applications based on this smart contract technology. Smart contracts are programmatic agreements that can execute automatically when certain conditions are met.

Ether (ETH) is the native token of the Ethereum network. ETH is used to process transactions and give developers power to run their programs. Ethereum Classic (ETC) is basically an older version of Ethereum, but there are significant differences between the two currencies.

What Is Ethereum Classic (ETC)?

Ethereum Classic is the original Ethereum blockchain and ETC is its native token.

Ethereum (ETH) is the blockchain that resulted from a hard fork of the network that happened in July 2016. ETH and ETC share the same blockchain record prior to a hard fork. Since they both stem from the same project, ETC classic has many of the same features as ETH.

To understand the difference between ETH and ETC, and whether they make sense as part of your crypto portfolio, it’s important to first have a firm grasp of how smart contracts work.

What Is a Smart Contract?

Simply put, a smart contract is an agreement between two parties written in code. The blockchain will execute the terms of the contract automatically, when conditions agreed upon by the two parties are met.

Because blockchains are also immutable (their records cannot be changed), smart contracts create a lot of opportunities for certain businesses to do things faster, more efficiently, and in a way that doesn’t require a third-party.

Smart contracts are steadily becoming a bigger part of how crypto works. Many different types of cryptocurrencies can use smart contracts, but Ethereum was the first and remains the most prominent leader in the space.

Ethereum Classic Definition

Ethereum Classic (ETC) is simply the first version of the Ethereum blockchain. Before July 2016, Ethereum Classic was known as “Ethereum.” Today, what we refer to as “Ethereum” is actually the newer blockchain that was hard forked from the Ethereum Classic blockchain.

Ethereum Classic History

This history gets quite complicated and technical. A simplified summary of the altcoins might go something like this:

• Developers created the DAO (decentralized autonomous organization) on Ethereum with the goal of funding future development of decentralized applications on Ethereum.

• The DAO had its own tokens that were interchangeable with ETH tokens and executed contracts using Proof-of-Work.

• After hackers took advantage of a flaw in the DAO smart contract and stole $50 million worth of ETH, the community decided that the network would create a hard fork as the solution to the security challenges.

• The new blockchain created as a result of the fork would be called Ethereum and use Proof-of-Stake to execute contracts. The old blockchain would be called Ethereum Classic.

Ethereum vs Ethereum Classic

Both networks allow software developers to use smart contracts to build centralized applications.

One pro of ETH (which is also a con of ETC) is that it has a larger market cap and user base than ETC. This makes ETH less volatile overall, gives the token higher liquidity, and makes it more popular on exchanges. That means that ETH may have less investment risk than ETC.

ETH also has the added use case of being fuel or “gas” for decentralized applications (dApps). Many developers build decentralized finance (DeFi) protocols on top of Ethereum. To use those kinds of apps, users need ETH tokens. Sometimes ETH is the only token that users can exchange for other tokens necessary for participating in the platform. Other times, decentralized applications require small amounts of ETH to perform actions.

For example, Crypto Kitties was one of the first big dApps. The game allowed users to buy, sell, and trade virtual cats that could be “bred” with one another, creating new unique virtual cats. To participate in the game, users needed ETH tokens.

ETH also has stronger support from something called the Enterprise Ethereum Alliance. This group has more than 200 members including big companies like Microsoft, VMWare, Intel, CitiBank, JP Morgan Chase, and more.

At the time of writing, ETC was the #18 cryptocurrency with a market cap of just over $5 billion. By comparison, Ethereum (ETH) is the second-largest cryptocurrency with a market cap of about $212 billion. Both tokens can be traded as speculative assets and both are listed on many of the most popular crypto exchanges.

Bitcoin remains the largest cryptocurrency, with a market cap of $556 billion.

Recommended: Top 30 Cryptocurrencies in 2021 (Based on Market Cap)

The Future of Ethereum Classic

What is Ethereum Classic when it comes to the future? In all likelihood, not much.

Looking at Ethereum Classic vs Ethereum, it’s not hard to see that Ethereum has better prospects for the future. There’s more trust in the ETH network, it has more backing, and it has a much larger market cap when compared to the Ethereum Classic value. There are also a lot of DeFi platforms and other dApps built on Ethereum, more so than on any other smart contract platform.

To make matters worse, the Ethereum Classic network has suffered several 51% attacks. This can happen when attackers gain enough hashing power to control the majority of the network. Then they can alter the blockchain, leading to potential problems like double spent transactions, where users can send the same coins more than once.

The Takeaway

Ethereum Classic is the original version of Ethereum, which has experienced several security issues, including several attacks since the original DAO hack, and the problem doesn’t yet appear to be fixed. Even if the network were to be made more secure, restoring people’s trust in ETC could prove difficult when there are so many other types of cryptocurrencies available.

Whether or not you want to invest in ETC, you may still be interested in cryptocurrency. A great way to start building your portfolio is via the SoFi Invest® brokerage platform, which allows you to buy and sell cryptocurrencies as well as other types of investments, such as stocks and exchange-traded funds.

Photo credit: iStock/MStudioImages


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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Purchasing Power 101: Examining the Value of the US Dollar

Purchasing Power 101: Examining the Value of the US Dollar

Purchasing power is a concept used to express the amount of goods and services a consumer or business can buy with a given unit of currency. In the United States, purchasing power is directly linked to the value of the dollar.

Due to inflation, a dollar today typically won’t go as far as it did last year. And a dollar next year won’t buy the same things that it did this year. This fluctuation in US dollar purchasing power is constant, and goes unnoticed, except in times of extreme inflation.

How Does Purchasing Power Impact Investors?

Once you understand the purchasing power definition, you can start to understand its context for investing. The purchasing power of a dollar affects investors because it makes an impact on virtually every aspect of the broader economy. When the dollar buys less, it changes the shopping decisions of consumers, the hiring practices of employers, the strategic decisions of corporations, and the monetary policy of the Federal Reserve.

One way to track inflation and purchasing power of a dollar is the Consumer Price Index (CPI), a statistic compiled by the US Bureau of Labor Statistics (BLS), which reports the figure every month. The statistic measures the average of prices of a set of goods and services in sectors such as transportation, food, and healthcare. Economists consider it a valuable gauge of the ever-changing cost of living, though it does exclude some important spending categories, including real estate and education.

Investors, executives and policymakers use CPI as a lens through which to scrutinize other economic indicators, including sales numbers, revenues, earnings and so on. It also determines the payments made to the millions of people on Social Security, which gets adjusted for the cost of living every year, and retirees drawing a pension from the military or the Federal Civil Services.

Why Does the Value of the Dollar Change?

A number of factors drive the value of the US dollar, including large scale factors having to do with economic cycles, government politics and international relations. But the dollar has also experienced inflation for most of the last century.

Inflation rose after World War I amid increased demand for food and other raw materials, which raised prices of most consumer goods up until the Great Depression, in which the country experienced prolonged deflation.

That’s when President Franklin Roosevelt stepped in with a surprising policy decision: He banned private ownership of gold, and required people to sell their holdings to the government. That allowed the Federal Reserve to increase the money supply and stop deflation in its tracks.

Since 1933, through World War II, the Cold War, and a host of changing monetary and economic policies, the US dollar has seen various rates of inflation. It reached its peak during the late 1970s and early 1980s oil and gas shortages exacerbated existing inflation and led to a gas shortage, and an increase in the price of manufacturing and shipping of nearly every single consumer good. Using 2020 dollars as a measure, the dollar fell from $6.39 in 1971 to just $2.28 in 1987.

Inflation rose at a more steady pace through the 1990s, falling to historically low levels in the past decade. One reason for the ongoing inflation is that the Federal Reserve continually increased the money supply via economic stimulus. The logic is simple supply and demand: If there are more dollars, then each one is worth less in terms of purchasing power.

In response to the Covid-19 pandemic and the ensuing lockdowns, the Federal Reserve has injected trillions into the economy. That, along with other stimulus measures, has many investors worried about the impact on the purchasing power of the dollar, and what that might mean for the broader economy.

What Purchasing Power Means for Investors

Generally, investors consider inflation a headwind for the markets, as it drives up the costs of materials and labor, boosts the cost of borrowing and tends to reduce consumer spending. That all tends to translate to lower earnings growth, which can depress stock prices.

But after decades of steady inflation, the markets have priced in a certain amount of shrinkage when it comes to the purchasing power of the dollar. Inflation has a great impact when it occurs suddenly and unexpectedly.

But inflation can have benefits for investors as well. During an economic upswing, inflation is a reliable side effect of prosperity, since economic booms produce higher profits, which drives up the markets. Historically, some experts say that the decades when the S&P 500 Index has delivered the highest returns have been when inflation has been between 2% to 3% annually.

Investors saving for long-term goals, such as retirement, must take declining purchasing power into account when determining how much they’ll need to reach those goals.

How Does Inflation Influence Stocks?

Inflation impacts different types of stocks differently, and there are several strategies that investors can use to hedge against inflation. During periods of high inflation, growth stocks tend to underperform, simply because so much of their value is tied up in the expectation of future earnings, and inflation diminishes those expectations.

Value stocks, on the other hand, typically boast steadier earnings, and are valued in line with those earnings. As a result, value stocks, as a category, tend to hold up better during periods of high inflation.

Recommended: Exploring Different Types of Investments

Other investments to consider during periods of high inflation include dividend-paying utility stocks and REITs, gold and other commodities. And because periods of high inflation usually brings higher interest rates, it can be a good time to buy bonds, especially government bonds

The Takeaway

The value of the dollar, in terms of what it can buy, changes over time, but inflation isn’t always bad news for investors. Some stocks may perform better than others in an inflationary environment, and higher interest rates may be good news for bond investors and savers.

If you’re ready to build a portfolio taking your inflation expectations into account, a great way to start is via the SoFi Invest® brokerage platform. You can use the platform to purchase stocks, exchange-traded funds (ETFs) and cryptocurrency.

Photo credit: iStock/pcess609


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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What is Cosmos Crypto? How to Buy ATOM Coin

What Is Cosmos Crypto? How to Buy ATOM Coin

Cosmos Crypto is a blockchain, developed by a Swiss nonprofit, with the goal of connecting multiple blockchains with each other. The ATOM coin powers the proof-of-stake blockchain underlying Cosmos Crypto.

What is Cosmos Crypto?

Cosmos is a protocol that supports something called “blockchain interoperability,” which makes it possible for different blockchains to communicate with each other. Cosmos aims to link up many crypto networks with open-source tools that allow for cross-chain transactions.

Unlike many other types of cryptocurrency, Cosmos and the Cosmos cryptocurrency (ATOM) exist to serve other networks to create a scalable, decentralized blockchain web.

What Is ATOM Coin?

The ATOM cryptocurrency powers the Cosmos Hub proof-of-stake blockchain. This token is the Cosmos coin and an important part of blockchain interoperability on the Cosmos network. Users can earn ATOM tokens via a hybrid proof-of-stake algorithm and help to secure the Cosmos Hub. The ATOM cryptocurrency also plays a role in governance for the network.

Cosmos compares its ATOM tokens to the ASIC machines used to mine Bitcoin. A technical paper written by the Tendermint team once described the ATOM crypto as a piece of virtualized hardware that people need to obtain to be able to participate in the Cosmos network.

Recommended: How Many Bitcoins Are Left?

ATOM Coin Price

At the time of writing, ATOM was the 39th-largest crypto by market cap, with a price of $12.08 per coin. The cryptocurrency appreciated by roughly 110% year-to-date, having begun 2021 around $6.00. It reached an all-time high on May 7, 2021, at $32.14. The all-time low was $1.13, recorded on March 13, 2020.

History of Cosmos (ATOM) Crypto

The history of Cosmos goes back to 2014 when developers Ethan Buchman and Jae Kwon created Tendermint, the consensus algorithm that serves as the backbone to the Cosmos network. In 2016, Buchman and Kwon published the Cosmos whitepaper. That same year, the first token sale for ATOM occurred.

A Swiss non-profit organization called The Interchain Foundation (ICF) helped launch and develop Cosmos, which founders have referred to as “the internet of blockchains.” In 2017, the organization hosted an initial coin offering (ICO) for the ATOM token, raising more than $17 million. Tendermint Inc. raised $9 million in 2019 to continue developing the project.

How Does the Cosmos Network Work?

A proof-of-stake consensus algorithm secures the Cosmos network. Validator nodes stake a certain amount of ATOM tokens, with those staking the most having the highest odds of being chosen to verify transactions and earn rewards. Dishonest nodes get penalized and lose the tokens they staked.

Cosmos works to create a collaborative ecosystem of different blockchains that can share data and tokens in a decentralized way, independent of any third-party. New blockchains can be tethered to the Cosmos Hub, where they can communicate with other blockchains that are also connected to the Hub.

The Cosmos network has three layers, tied together by a set of open-source tools that allow developers to build blockchain applications.

• The application layer works to process transactions and update the state of the network.

• The networking layer allows for communication across blockchains.

• In the consensus layer, nodes agree on the current state of the system.

The application layer works to process transactions and update the state of the network. The networking layer allows for communication across blockchains. And the consensus layer is where nodes agree on the current state of the ATOM DeFi system.

Tendermint

The most fundamental part of the Cosmos network is Tendermint, which gives developers the ability to easily build blockchains. Tendermint Byzantine Fault Tolerance (BFT) is an algorithm used by computers that run the Cosmos software to commit blocks to the blockchain, validate transactions, and secure the network.

A key part of Tendermint is Tendermint Core, a proof-of-stake governance mechanism that keeps all the computers that run the Cosmos Hub in sync. As mentioned in the section on Cosmos crypto, validator nodes have to stake ATOM to power the blockchain. Being a validator requires a node to be in the top 100 nodes that are currently staking ATOM. Nodes receive voting power in proportion to the amount of ATOM staked.

Cosmos Hub

The first blockchain to launch on the Cosmos Network was the Cosmos Hub. The hub functions as a gateway through which all the different blockchains created within the network could function. The different blockchains are referred to as “zones.”

Within Cosmos, each zone can perform independent functions. That means everything from authenticating transactions and accounts to creating and distributing new tokens and more. The Cosmos Hub lets all the blockchains work together by keeping track of their states.

What Can You Use ATOM for?

Developers need ATOM to be able to participate in the network and vote on proposed changes. Traders can trade crypto like ATOM to speculate on the price, trying to buy low and sell at a higher price later. Investors can also stake their ATOM crypto to earn rewards. Staking rewards are like “crypto dividends” in that users can be regularly rewarded with more cryptocurrency in proportion to the value of the crypto they stake.

How to Invest in Cosmos ATOM Cryptocurrency

Cosmos crypto (ATOM) trades on many popular exchanges like Coinbase, Crypto.com, CEX.io, and Kucoin. Assuming an investors has already familiarized themselves with all the investing in crypto basics, all it takes is a few simple steps to begin buying ATOM.

Step 1: Open an Account

To buy ATOM, you need an account with an exchange or another platform, such as SoFi Invest brokerage platform, that allows you to purchase crypto. Make sure the exchange provides trading for the ATOM cryptocurrency. ATOM trades on many popular exchanges like Binance, Huobi Global, and Gate.io.

Step 2: Make a Deposit

After creating an account, you can then deposit either some bitcoin, dollars, or a stablecoin, depending on what trading pairs the exchange has available.

Step 3: Execute the Trade

Simply select the trading pair that includes ATOM and the currency deposited during step number two. For example, if you have bitcoin and want to buy ATOM, you would select the pair called “BTC/ATOM.” If you had dollars, it might be “USD/ATOM.” For a stablecoin like USDT, it might be “USDT/ATOM.” Enter a buy order for the desired amount of coins at a desired price.

Alternatively, on exchanges that include order books in the user interface (like Binance), simply select the sell order at the top of the book and buy from it. As an alternative, you could use a decentralized exchange (DEX) to buy ATOM. While the same crypto regulations apply, registering with a DEX is typically faster and involves less identifying information.

Step 4: Store Your Crypto

After buying ATOM tokens, you may want to consider moving your crypto off of an exchange and into a hardware wallet that supports ATOM. Using this kind of crypto wallet provides extra security, as you can take the coins offline and put them into cold storage where they are inaccessible to hackers.

Is ATOM a Good Investment?

It depends on many factors, and is a personal decision. It’s still a relatively new cryptocurrency, and all cryptocurrency investment involves risk. That said, the more blockchains that connect to the Cosmos network, the more valuable ATOM coin could become, in theory. However, such growth could take a long time, so investors may need to prepare to HODL.

Recommended: Crypto Taxes (2021): How to Pay Taxes on Cryptocurrency

The Takeaway

Cosmos Crypto is a protocol that aims to integrate multiple blockchains, allowing holders of different cryptocurrencies more options for using their crypto. The ATOM coin is the cryptocurrency that powers the Cosmos network.

If you’d prefer to invest in ATOM without opening an account on an exchange, you can open a crypto trading account on the SoFi Invest platform. It allows you to build your own portfolio including 21 different types of crypto, as well as stocks and exchange-traded funds.

Photo credit: iStock/Drazen_


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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What Are Non-Transparent ETFs?

What Are Non-Transparent ETFs?

Unlike ordinary exchange-traded funds (ETFs), which disclose their underlying assets daily, non-transparent ETFs are only required to reveal their holdings on a quarterly or monthly cadence.

This ability to conceal their assets can help active non-transparent ETF managers to cloak their strategies for longer periods, with the aim of maximizing performance.

To understand some of the advantages these funds may offer investors, it helps to compare them with standard ETFs.

Recommended: ETF Trading 101: Learning about Exchange Traded Funds

Why Would You Invest in Non-Transparent ETFs?

For nearly 30 years, ETFs have been a mainstay for big institutional investors as well as individuals, thanks to their transparency, tax efficiency, and low cost. Today, the ETF industry in the US has over $6.5 trillion in assets under management.

Traditionally, investors have found ETFs an attractive option because of their liquidity, which has made ETFs more transparent than mutual funds. Unlike mutual funds, you can trade ETF shares throughout the day on an exchange, similar to stocks. And the way shares are created and redeemed gives investors more visibility into the funds’ underlying assets, compared with mutual funds. This ‘transparency’ has been true of both actively managed ETFs as well as passive ETFs, which track an index such as the S&P 500.

But the fundamental transparency of the ETF “wrapper” or fund structure has been a thorn in the side of some active ETF managers, who may prefer less visibility around their holdings for strategic reasons. Hence the appeal of non-transparent ETFs to active managers.

Active non-transparent ETFs — also called ANT ETFs — aren’t required to reveal their assets daily, as noted above; rather they report a snapshot of what they hold on a monthly or quarterly basis, similar to a mutual fund. In some cases they report the assets they hold, but not how much they hold.

Recommended: ETFs vs. Index Funds: What’s the Difference?

How Passive vs. Active Strategies Can Impact Transparency

If you think about it, the evolution of active non-transparent ETFs makes sense in the larger context of the ETF universe, where passively managed ETFs comprise more than 90 percent of that market.

Passively managed ETFs offer some of the lowest fees in today’s market, which is one reason they’re typically cheaper to own than mutual funds. The overall tax efficiency of index ETFs also helps to lower investing costs, and has contributed to their overall popularity with investors.

ETFs, of course, are also valued for their role in adding diversification to investors’ portfolios, with many ETFs invested in specific sectors (e.g. electric vehicles, pharmaceuticals) or securities (e.g. US Treasuries, corporate bonds).

No matter whether an ETF is invested in a broader equity market or a niche sector, passive ETFs are designed to mirror or track the stocks in a certain index. Thus the transparency of these funds is part of how they work.

That’s not true of active ETFs, which rely on the oversight of a fund manager to choose the underlying assets (just like an active mutual fund). But because ordinary ETFs require a daily disclosure of the fund’s holdings, this can hamper an active manager’s ability to execute their investment strategies.

When a fund’s assets are disclosed on a daily basis, the market can bid up the price for their holdings. And while in the short term this might be good (the assets could go up), in the long term it could disrupt the fund manager’s strategies. And, if other investors try to anticipate the trades that active managers might make, sometimes called front running, that could cause asset prices to fluctuate and potentially impact the ETF’s performance.

The Use of Proxies in Non-Transparent ETFs

How might a non-transparent ETF solve this problem?

The way ETFs keep their price in line with their assets is that the sponsor of the ETF trades throughout the day with an “authorized participant.” These authorized participants will create and redeem “baskets” of securities, i.e. the stocks or bonds that the ETF holds, and then trade them to the ETF for shares of the fund, which allows the ETF to stay in line with the price of its underlying stocks.

This process obviously requires a great degree of transparency across the board. So, how does a non-transparent ETF obscure its holdings?

The answer is, by the use of “proxies”: These are baskets of stock that are similar to but not identical to the underlying holdings of the ETF.

Thus, non-transparent ETFs are able to occupy a happy middle ground in the ETF world: they enable fund managers to conceal their strategies while keeping the liquidity of pricing that is core to trading ETFs overall.

The History of Non-Transparent ETFs

For years, the ETF industry was comprised mostly of index ETFs, which helps to explain why the universe of ETFs is primarily passive. But over time, some investment companies began seeking regulatory approval for non-transparent ETFs, also sometimes called semi-transparent ETFs, in order to pursue more active strategies. The approval for these funds, and the technology underlying the non-transparent strategy, began rolling out in late 2019, and ANT ETFs have seen steady inflows since then.

Though non-transparent ETFs are still a relatively small part of the overall ETF market, this sector is gaining traction and is now approaching $2 billion AUM. This reflects a similar trend among active ETFs, which have also seen more inflows this year.

The Takeaway

Non-transparent ETFs may be a relative newcomer in the multi-trillion-dollar world of ETFs, but they offer an attractive new opportunity for investors who are interested in active investment styles — but still want the cost efficiency and liquidity of an ETF. Non-transparent ETFs also give active fund managers the ability to cloak their strategies, which may aid potential outcomes.

SoFi Invest is one way for investors to start building a portfolio including ETFs and non-transparent ETFs. SoFi offers customized portfolios based on what investors themselves want and need, just provide some basic information about what your goals and risk tolerance and SoFi can do the rest for you.

Photo credit: iStock/ANA BARAULIA


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected] Please read the prospectus carefully prior to investing. Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
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33 Ways to Make Money From Home

33 Ways to Make Money From Home

According to a study by Pew Research published late in 2020, 71% of those whose responsibilities can be taken care of digitally are working from home, up from merely 20% pre-pandemic.

As vaccines are distributed and the world begins to open back up, many of us are returning to the office. But if you’re hoping to find real ways to make money from home, take heart: there are many.

Here are 33 possibilities for those asking themselves, “How can I make money from home?”

Easy Ways to Make Extra Money from Home

1. Test Websites

Most websites are well-designed and easy to use because they’re tested by real users— a service they get paid to do. Platforms like UserTesting will link you up with companies who need website testers, and you’ll earn money for each test you do, ranging from $4 to $120, depending on the type of test. There are also opportunities to earn more money for live interviews about your experience.

2. Test Products

Products also need testers, and that testing can be done at home, too. Companies like Product Report Card will pay for opinions on gadgets, personal care products, and more. (Plus, you might get some free stuff in the bargain.)

3. Take Surveys

If you start poking around product testing websites, you’ll notice most of them capture your opinion by using surveys—and there are plenty of other websites that pay for your surveyed opinion, too. Survey Junkie is one popular option, as is Swagbucks. These opps won’t get you rich quick, but they’re a great way to earn some extra money at home.

4. Become a Voice Actor

If you’ve got a voice for radio—or an audiobook, or a video game, or the PA announcement at your local grocery store—you may be able to earn money doing voiceover work in the comfort of your own home. (Or more accurately, the comfort of your own closet, which is probably the most noise-insulated room in the house.)

5. Do Closed Captioning

If you’re a quick typist with the ability to pay close attention to speech, you might make a great transcriptionist or captioner. Companies like Rev make it possible to get paid for captioning video content, and you get to set your own hours.

6. Become a Translator

If you are multilingual, you can put those skills to work by becoming a professional translator. Gengo is one platform where translators can find jobs, choosing the ones that fit their abilities and availability.

7. Teach an Online Course

We’ve all got some valuable talents to share with the world—and chances are there’s someone out there who would pay to learn more about what you’re an expert in. Whether it’s creative writing, singing, or coding in JavaScript, get your knowledge out there and get paid for it with platforms like Udemy and Teachable.

8. Become a Tutor

Similarly to starting your own course, tutors are paid to teach local students who may be studying for the SAT or just trying to improve their grades. Using video chat can expand your client base far beyond your neighborhood.

9. Offer Music Lessons

If you play an instrument or know the ins and outs of voice control, you can leverage those skills into cash money by offering music lessons—in person or online.

10. Write a Book

Okay, okay—this one is not a quick way to make money or a guaranteed one, by a long shot. But if you’ve got the chops and the dedication, you might just actually write the next great American novel. Or memoir. Or essay collection. Just know that as far as the money goes, it’s a slow burn.

11. Start a Blog

If you’re a writer who wants to hone their chops on an ongoing basis—or you’re just looking for a fun and audience-friendly topic like baking or being a mom—starting a blog can translate into earnings over time, thanks in large part to affiliate marketing. However, a successful blog could also land you speaking gigs, public appearances, and other earning opportunities.

12. Become a Freelance Writer

Another way to translate your writing skills into cash: becoming a freelance writer, either on the side or full time. It can be a tough industry to break into, but once you’ve established yourself, it’s totally possible to earn a living wage doing this work. Having examples of your published work is the best way to show a prospective client your writing skills.

13. Or a Freelance Copy Editor

Don’t want to create new content, but happy to read others’ for errors? Language lovers might be able to earn a living as freelance copy editors. Fiverr is one place to find individual copy-editing jobs, though longer-term contract positions are also regularly listed on job boards like Indeed.

14. Or a Freelance Graphic Designer

If you have design skills, you could turn your doodles into dollars by sketching logos for businesses, graphics for company websites, and more. You’ll likely need a portfolio of your work to show prospective clients.

15. Or a Freelance SEO Consultant

You can see where we’re going with this—whatever skills you have, you may be able to leverage into a freelance, at-home source of earnings. SEO in particular is a service that companies will pay mighty well for… after all, good rankings translate into more money in their pockets, too.

16. Become a Virtual Assistant

If you’re the kind of Type-A person whose Google calendar is comprehensive and color-coded, consider channeling those organizational skills into becoming a virtual assistant. Along with offering a great way to make money from home, this gig has the added bonus of a variable work day—you might be scheduling work travel or managing invoices or answering phone calls, but there’s always plenty to do!

17. Sell Your Crafts

If you already spend your downtime enjoying a craft like painting or knitting, why not consider placing your wares up for sale on a site like Etsy? Not only will your art bring smiles to other peoples’ faces—it might also bring you some extra cash.

18. Design a T-shirt (or Mug, or Tote Bag)

Got a witty slogan or beautiful image in mind that just has to be on a shirt somewhere? Make it happen with a website like CafePress or CustomInk, which makes it easy to create and sell your unique designs.

19. Become a YouTuber

If you’ve got something to say—and are creative enough to say it with engaging video content—YouTube can be a lucrative way to make money from home. Beware, though: this is a side-gig that can easily take a lot of time and have considerable expense in audio/video equipment.

20. Stream Your Gaming Habits on Twitch

Earning money by playing video games might sound like a fantasy, but platforms like Twitch make it possible—provided you’re actually good, or at least entertaining to watch.

21. Get Paid to Post on Insta

Yes, you can get paid (and get free stuff) to be a brand ambassador on Instagram and other social media platforms—though you’ll likely need good personal branding and a decent following to do it. Some people spend time curating their social media content already, which means those requirements are probably within reach.

22. Sell Your Stuff

If you’re overdue for a closet clean-out, consider selling the stuff you don’t need anymore on an app like LetGo or OfferUp. You know how they say one person’s trash is another’s treasure? Well, in this case, the same item can be both—for you!

23. Sell Your Photos

If you know your way around a DSLR—or honestly just an iPhone—you might be able to sell your stock-photo-worthy snaps for money. Platforms like Alamy and GettyImages are two places to sell or license your pictures.

24. Rent Out Your Clothes

Yes, this is real! Turn that prom dress in your closet into income by renting it out to others. Platforms like RentNotBuy can help.

25. Rent Out Your Camping Equipment

Or your lawnmower, or your bike—basically anything you don’t use on the regular, you could be earning money by renting out. Check out the database at Loanables, which also makes it easy to list your own items for rent. Bonus: sharing items is a way to reduce our overall carbon footprint.

26. Rent Out Your Driveway

There are lots (and lots) of cars on the road these days, which means people need lots of parking space. If you have extra room in your driveway, you can rent it out for pretty good money using platforms like Neighbor and JustPark.

27. Do Data Entry

Are you a quick typist with great attention to detail? These days, companies who need data entry sometimes hire remote workers, which means you can populate those spreadsheets in the comfort of your own home.

28. Or Customer Service

Many of us have some sort of customer service background—and thanks to the magic of the internet, you don’t necessarily need to work in a crowded, noisy call center to put that resume to use. Many companies offer virtual customer service employees, including Amazon. You’ll definitely want to invest in a headset to take those calls with ease, though.

29. Do Medical Coding And Billing

The work might be tedious, but it pays quite well—and although it’s counterintuitive, you don’t have to work at a hospital to do it. Many medical establishments outsource their coding and billing needs, and companies like Aviacode allow medical coders to work from home while earning both a salary and valuable benefits.

30. Start a Podcast

It might be a long shot, but many successful podcasts started as a casual, at-home conversation between friends. If your subject matter is interesting enough to draw advertisers, voila: at-home income!

31. Start An At-home Daycare

Love kids? You could get paid to care for them by offering at-home daycare services for parents who need time to work or meet other commitments. Starting a business like this may require licensing and home modifications, but you can also hire out your services as a babysitter using an app like UrbanSitter or Bambino.

32. Take Up Professional Pet-sitting

Getting paid to hang out with puppies sounds like a dream—but it can be your reality if you charge for pet-sitting services. Apps like Rover make it easy to get started, but you can also just advertise around your neighborhood and by word-of-mouth.

33. Start Your Own Business

Many of the options listed here might provide potential side income, but if your career is one whose services can easily be done without a physical storefront, the internet could be your key to freedom on a full-time basis. Although becoming your own boss certainly takes some up-front investing, as well as energy and time, your income potential won’t be limited by what your employer decides to pay you. A major decision before taking the leap to self-employment is how to get benefits that may have been provided by an employer, such as health insurance and retirement benefits. Having a solid plan will make the path forward easier to navigate.

The Takeaway

Making money from home is great, but getting your budget nailed down can help you keep more of the cash you work for.
One way to put your hard-earned bucks to work for you: SoFi Money®, a cash management platform that’s a great way to spend and save without any account fees.

Learn how SoFi Money can help you reach your savings goals.



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